China’s move to stabilize yuan spurs Asian equities; gold flat
Lira slides as Turkish markets reopen; peso rallies on Nafta
Stocks markets across the world started the week on the front foot, with U.S. futures rising alongside European equities after big gains for most Asian gauges. A British holiday overshadowed the European session, and trading volumes were depressed.
The Stoxx Europe 600 Index climbed as every industry sector advanced. Contracts for the S&P 500, Nasdaq and Dow Jones all pointed to a positive open in the U.S., where stocks closed at a record on Friday. The strongest moves on Monday were in Asia, where recent efforts by the Chinese central bank to shore up the yuan helped spur large gains for equities in Hong Kong, China and Japan. The yuan was stable, while the dollar edged higher and the euro dropped.
Global equities are grinding upward despite trade talks in Washington between the world’s two largest economies yielding little visible progress toward a resolution. Meanwhile, Federal Reserve Chairman Jerome Powell indicated the U.S. will continue to follow a path of gradual tightening. Investors have fully priced in a rate increase next month and see an above-60 percent probability of another move by the Fed’s meeting in December.
Elsewhere, the Mexican peso climbed after people familiar with the discussions said a Nafta deal with the U.S. could come as soon as Monday.
Terminal users can read more in our Bloomberg Markets Live blog here.
Here are some key events coming up this week:
- Earnings are due from companies including Canada’s largest banks and China Construction Bank Corp., ICBC, Pernod Ricard and Dollar General.
- China’s official factory PMI are due Friday.
- The U.S. economy probably grew in the second quarter at a slightly slower pace, economists predict ahead of Wednesday’s report.
- The Bank of Korea sets policy on Friday. Weak jobs growth has cooled speculation of an interest-rate increase.
These are the main moves in markets:
- Futures on the S&P 500 Index rose 0.2 percent as of 8:14 a.m. London time, the highest in seven months.
- The Stoxx Europe 600 Index climbed 0.3 percent to the highest in more than a week.
- The U.K.’s FTSE 100 Index gained 0.2 percent.
- Germany’s DAX Index increased 0.6 percent to the highest in two weeks.
- The MSCI Asia Pacific Index increased 1.2 percent to the highest in two weeks on the largest climb in more than six weeks.
- The MSCI Emerging Market Index jumped 1 percent to the highest in almost two weeks.
- The Bloomberg Dollar Spot Index gained less than 0.05 percent.
- The euro decreased 0.1 percent to $1.1609.
- The British pound fell less than 0.05 percent to $1.284.
- The Japanese yen strengthened 0.1 percent to 111.08 per dollar.
- The yield on 10-year Treasuries gained less than one basis point to 2.81 percent.
- Germany’s 10-year yield declined two basis points to 0.33 percent, the biggest fall in more than a week.
- Britain’s 10-year yield rose one basis point to 1.272 percent, the highest in two weeks.
- The spread of Italy’s 10-year bonds over Germany’s decreased one basis point to 2.7962 percentage points.
- West Texas Intermediate crude fell 0.3 percent to $68.53 a barrel, the largest fall in more than a week.
- Gold fell less than 0.05 percent to $1,205.34 an ounce.
August 27, 2018, 5:17 PM GMT+10