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U.S. futures flat, European shares gain after Shanghai falls
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Ten-year Treasury yield holds below 3 percent; dollar steady
Stocks were mixed on Friday, with U.S. futures drifting, European shares higher and most Asian equities slipping as markets remained on edge after a tumultuous week dominated by worries over protectionism. Italian bonds slumped, while core European debt gained with Treasuries.
China’s currency headed for an eighth weekly decline, the longest run since the start of the country’s modern foreign-exchange rate regime in 1994. The pound pared a drop below $1.30 after Bank of England Governor Mark Carney said the chance of a no-deal Brexit is “uncomfortably high.”
The Trump administration’s unpredictability on trade kept markets on the back foot this week even against the backdrop of a mostly positive earnings season and an upbeat assessment of the American economy by the Federal Reserve on Wednesday. About two-thirds of the way into the results season, U.S. and European companies have posted double-digit EPS growth,according to JPMorgan strategists. Data due Friday will probably show that the U.S. economy added jobs at a healthy clip again in July.
Elsewhere, Turkey’s lira, bonds and stocks extended their slide after the U.S. imposed sanctions on two government ministers over the detention of an evangelical pastor.
Oil rallied from the lowest level in more than a month amid signs the drain from the biggest U.S. supply hub will continue.
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Here are some events to watch out for during the remainder of this week:
- Earnings season continues with Berkshire Hathaway among companies reporting results. Toyota Motor Corp. reported first-quarter profit that beat analysts’ estimates and said it is preparing for challenges in a U.S. market potentially hit by a trade war.
- The U.S. jobs report is on Friday, and is predicted to show a healthy labor market, with 193,000 new jobs.
These are the main moves in markets:
Stocks
- The Stoxx Europe 600 Index gained 0.5 percent as of 10:44 a.m. London time, the largest rise in more than a week.
- Futures on the S&P 500 Index fell less than 0.05 percent.
- The U.K.’s FTSE 100 Index gained 0.5 percent.
- Germany’s DAX Index gained 0.6 percent.
- The MSCI Emerging Market Index climbed 0.1 percent, the first advance in a week.
- The MSCI Asia Pacific Index dipped 0.2 percent to the lowest in more than two weeks.
Currencies
- The Bloomberg Dollar Spot Index gained 0.1 percent to the highest in more than two weeks.
- The euro decreased 0.1 percent to $1.1578.
- The British pound dipped 0.1 percent to $1.3008, the weakest in 11 months.
- The Japanese yen fell 0.1 percent to 111.72 per dollar.
Bonds
- The yield on 10-year Treasuries decreased one basis point to 2.98 percent.
- Germany’s 10-year yield sank three basis points to 0.43 percent, the lowest in a week on the biggest tumble in six weeks.
- Britain’s 10-year yield dipped two basis points to 1.377 percent, the largest dip in more than two weeks.
- Italy’s 10-year yield gained seven basis points to 2.979 percent, the highest in eight weeks.
Commodities
- West Texas Intermediate crude climbed 0.3 percent to $69.16 a barrel.
- Gold fell less than 0.05 percent to $1,207.70 an ounce, the weakest in almost 17 months.
By Yakob Peterseil – August 3, 2018, 7:53 PM GMT+10
— With assistance by Sarah Ponczek, Amanda Wang, Jeanny Yu, and Adam Haigh