Euro little changed before ECB; base metals extend declines
Canada, Mexico may get tariff exceptions; EM shares rally
European shares followed Asian peers higher as investor concern about a potential global trade war appeared to ease. U.S. equity futures were mixed, the dollar was steady and Treasuries ticked higher.
The industrial goods and services sector led the advance in Europe, as traders spooked by tit-for-tat trade threats took solace from suggestions President Donald Trump’s tariff plan will spare select countries. The euro was little changed and bond yields edged higher across the continent ahead of the European Central Bank’s policy decision on Thursday.
The specter of a global trade war has had markets on edge this week, as Trump’s threats of steel and aluminum tariffs were met with talk of retaliation in China and Europe. Attention now turns back to central banks, with investors homing in on commentary from the ECB on Thursday before the Bank of Japan concludes its policy meeting Friday.
“If you look at the global economic backdrop the world still looks relatively good,” JPMorgan Asset Management Australia Chief Executive Officer Rachel Farrell told Bloomberg Television. “Long term we really look at fundamentals and fundamentals across the world are actually quite strong.”
Elsewhere, Bitcoin recovered some losses after dropping 7.9 percent on Wednesday in the face of fresh pressure from the U.S. securities regulator. Crude oil traded near $61 a barrel as most commodities slid for a second day. German factory orders dropped at the start of 2018 after demand for big-ticket items bloated books at the end of last year.
Terminal users can read more in our markets blog.
Here are some key events coming up this week:
- The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.
- The ECB isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing.
- BOJ monetary policy decision and briefing on Friday.
- U.S. monthly payrolls data come Friday.
And these are the main moves in markets:
- The Stoxx Europe 600 Index increased 0.1 percent as of 8:10 a.m. London time.
- The MSCI All-Country World Index gained 0.2 percent to the highest in more than a week.
- Futures on the S&P 500 Index climbed less than 0.05 percent.
- The U.K.’s FTSE 100 Index rose less than 0.05 percent.
- The Bloomberg Dollar Spot Index climbed less than 0.05 percent.
- The euro decreased less than 0.05 percent to $1.2409.
- The British pound increased less than 0.05 percent to $1.3899.
- The Canadian dollar gained 0.1 percent to C$1.2896 per U.S. dollar.
- The Mexican peso jumped 0.2 percent to 18.6833 per dollar with its fifth straight advance.
- The yield on 10-year Treasuries fell one basis point to 2.87 percent, the largest fall in a week.
- Germany’s 10-year yield was unchanged at 0.66 percent.
- Britain’s 10-year yield was unchanged at 1.495 percent.
- The Bloomberg Commodity Index dipped 0.2 percent to the lowest in more than three weeks.
- West Texas Intermediate crude climbed 0.1 percent to $61.21 a barrel.
- Gold gained 0.2 percent to $1,327.97 an ounce.
- LME aluminum fell less than 0.05 percent to $2,096.00 per metric ton, the lowest in more than 11 weeks.
— With assistance by Sarah Ponczek, Emily Cadman, and Ven Ram