Stocks Struggle as Trade Worries Linger; Yen Jumps: Markets Wrap: Bloomberg

  • Trump said to be considering tariffs on auto imports to U.S.
  • Treasury yield at 3%, dollar drifts; lira resumes slide

Fears surrounding global trade hung over markets on Thursday, with European stocks struggling for traction and U.S. futures nudging into the red following declines in Asia. The yield on 10-year Treasuries stabilized around 3 percent, while the euro gained.

Automakers were among the worst hit shares in both Europe and Asia after President Donald Trump ordered consideration of a probe into automobile imports to the world’s biggest economy. Alongside continuing angst in Turkey and uncertainty over Italy’s government, the news is helping sap momentum following gains for major American equity benchmarks on Wednesday. Turkey’s lira resumed its slump as traders weigh whether an emergency rate hike was enough to stem losses. Safe-haven assets including gold and Japan’s yen climbed. Oil slipped.

It’s been a torrid week across markets so far, with investors forced to navigate escalating geopolitical and trade risks, from Trump’s decision to back away from a recently announced agreement with China to uncertainty about whether his planned summit with North Korean leader Kim Jong Un will go ahead. Questions are swirling around the Italian populist government’s economic policies, while Brexit negotiations loom large over British assets. Amid the noise, somewhat dovish minutes from the Federal Reserve are being quickly forgotten.

Elsewhere, emerging-market currencies edged higher despite the lira move, and developing-nation stocks advanced. The euro strengthened after falling to a six-month low as traders await the latest minutes from the ECB.

Terminal users can read more in Bloomberg’s Markets Live blog.

These are some key events to watch this week:

  • Thursday sees the Bank of England Markets Forum at Bloomberg London. Speakers include BOE Governor Mark Carney and New York Fed President William Dudley.
  • At the St. Petersburg Forum Friday, Russian President Vladimir Putin and French President Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News Editor-in-Chief John Micklethwait.
  • Also Friday, European Union finance ministers discuss the latest on Brexit talks, in Brussels.

These are the main moves in markets:

Stocks

  • The Stoxx Europe 600 Index climbed 0.1 percent as of 8:11 a.m. London time.
  • Futures on the S&P 500 Index dipped less than 0.05 percent.
  • The U.K.’s FTSE 100 Index advanced 0.1 percent.
  • Germany’s DAX Index declined 0.1 percent to the lowest in more than two weeks.
  • The MSCI Emerging Market Index jumped 0.3 percent.
  • The MSCI Asia Pacific Index sank 0.2 percent to the lowest in more than two weeks.

Currencies

  • The Bloomberg Dollar Spot Index dipped less than 0.05 percent.
  • The euro increased 0.2 percent to $1.1719, the biggest climb in almost two weeks.
  • The British pound advanced 0.1 percent to $1.3359, the largest gain in a week.
  • The Japanese yen climbed 0.5 percent to 109.57 per dollar, the strongest in almost two weeks.
  • The Turkish lira decreased 2.4 percent to 4.691 per dollar, the weakest on record with the largest tumble in more than seven months.

Bonds

  • The yield on 10-year Treasuries gained one basis point to 3.00 percent, the biggest gain in a week.
  • Germany’s 10-year yield advanced one basis point to 0.51 percent.
  • Britain’s 10-year yield increased less than one basis point to 1.44 percent.
  • Italy’s 10-year yield decreased three basis points to 2.367 percent.

Commodities

  • West Texas Intermediate crude declined 0.4 percent to $71.57 a barrel.
  • Gold climbed 0.2 percent to $1,296.57 an ounce, the highest in more than a week on the largest increase in two weeks.
  • Brent crude fell 0.4 percent to $79.46 a barrel.

By and 

May 24, 2018, 5:19 PM GMT+10

Source: Bloomberg

 

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