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Dollar nudges up, Treasuries flat before latest Fed minutes
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Crude rises on U.S. stockpiles, Saudi stress; EM equities gain
European stocks pared an advance on Wednesday and U.S. futures turned lower as the investor confidence that powered gains a day earlier showed signs of ebbing. The dollar ticked higher and Treasuries were steady.
Technology companies helped keep the Stoxx Europe 600 Index in the green thanks to solid results from chip maker ASML Holding NV. But automakers weighed on the gauge after data showed car sales in the regionplunged in September. U.S. equity futures fluctuated before edging lower, pointing to a soft open after Tuesday’s surge.
The mood was better in Asia, as Japanese, South Korean and Australian shares posted strong gains. Caution was evident in the bond market, where Treasuries were stable and most European government bonds climbed. The pound dropped after U.K. inflation slowed more than expected.
A week after U.S. equity markets plunged, investors are digesting solid results from the likes of Goldman Sachs, Johnson & Johnson and Netflix. It’s still early in the earnings season but the better-than-expected numbers are welcome amid a risk-heavy global picture, which features periodic Brexit headlines, a divisive Italian budget, a lingering trade spat between the U.S. and China, concern surrounding the disappearance of a Saudi journalist and President Donald Trump’s criticism of the Federal Reserve.
While corporate results continue to arrive, the Fed will be back at the top of the agenda when the minutes of the latest policy meeting arrive later on Wednesday. They should offer more clues on the outlook for policy tightening into next year.
Elsewhere, emerging-market stocks built on Tuesday’s gains while their currencies were broadly steady. Turkish assets were mostly stable as the country took advantage of a lull in political turmoil to return to the dollar bond market. Oil edged higher after an industry report showed anunexpected drop in American crude stockpiles.
Hong Kong markets were shut for a holiday.
Terminal readers can read more in our Markets Live blog.
Here are some key events coming up this week:
- Euro area CPI is due on Wednesday.
- The EIA crude oil inventory report is due the same day.
- Minutes from the Fed will be published on Wednesday.
- Third-quarter GDP for China comes Friday in addition to last month’s retail sales and factory output.
These are the main moves in markets:
Stocks
- Futures on the S&P 500 Index fell 0.1 percent as of 9:34 a.m. London time.
- The Stoxx Europe 600 Index climbed 0.1 percent to the highest in a week.
- The U.K.’s FTSE 100 Index gained 0.3 percent to the highest in a week.
- Germany’s DAX Index sank 0.3 percent.
- The MSCI Asia Pacific Index jumped 0.9 percent to the highest in a week.
- The MSCI Emerging Market Index increased 0.2 percent to the highest in more than a week.
Currencies
- The Bloomberg Dollar Spot Index gained 0.1 percent.
- The euro decreased 0.1 percent to $1.1567.
- The British pound declined 0.3 percent to $1.3141, the weakest in more than a week.
- The Japanese yen advanced less than 0.05 percent to 112.24 per dollar.
Bonds
- The yield on 10-year Treasuries climbed less than one basis point to 3.16 percent, the highest in more than a week.
- Germany’s 10-year yield decreased two basis points to 0.48 percent, the lowest in more than two weeks.
- Britain’s 10-year yield declined two basis points to 1.59 percent, hitting the lowest in two weeks with its fifth straight decline.
- The spread of Italy’s 10-year bonds over Germany’s dipped two basis points to 2.9454 percentage points to the smallest premium in more than a week.
Commodities
- West Texas Intermediate crude climbed 0.3 percent to $72.12 a barrel, the highest in a week.
- Gold fell less than 0.05 percent to $1,224.33 an ounce.
— With assistance by Andreea Papuc, Constantine Courcoulas, and Adam Haigh
October 17, 2018, 7:45 PM GMT+11
Source: Bloomberg