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President Trump due to announce next Fed chair this week
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Central banks in Japan, U.S. and U.K. have policy meetings
Stocks in Europe were mixed and the euro gained at the start of a busy week for central banks, with policy meetings scheduled in Japan, the U.S. and the U.K. The dollar dropped and Treasuries inched higher as President Donald Trump prepares to name the Federal Reserve’s next chairman.
The Stoxx Europe 600 Index nudged lower, though markets showed little sign of distress as the Spanish government began the process of reasserting control after Catalonia’s declaration of independence. The country’s stocks outperformed and bonds gained, along with debt of other peripheral European nations after S&P Global ratings upgraded Italy on Friday. The British pound gained before the Bank of England’s rates decision. WTI crude was steady near a six-month high.
Investors will watch some of the world’s most influential policy makers this week for more clues about quantitative easing and the path of monetary tightening, with the Bank of Japan first up on Tuesday, followed by the Fed on Wednesday and the Bank of England on Thursday. Of those, only the Bank of England is expected to hike this time round. Meanwhile, speculation continues over who Trump will choose as the next Fed chair, with Governor Jerome Powell said to be the front-runner.
Here are some key upcoming events this week:
- Trump has said he’ll reveal his choice to lead the Fed by Friday.
- The U.S. central bank’s next rate decision is on Wednesday, with economists expecting policy makers to hold rates for now and to increase them at the December meeting.
- The U.S. October payroll report comes out Friday. On Monday, personal income and spending data comes out, which features the Fed’s preferred inflation gauge.
- Trump starts an 11-day trip to Asia, his first as president, on Friday. Trade and security issues — particularly North Korea — will probably be in focus.
- A probable BOE rate hike on Thursday will be the first in a decade.
- Euro-area GDP growth is seen slowing, while GDP reports from France and Spain and national CPI prints from the big four euro-zone economies are also among data piling up this week.
- The slew of earnings releases will culminate with Apple Inc. results Friday.
And these are the main moves in markets:
Stocks
- The Stoxx Europe 600 Index fell 0.1 percent as of 9:28 a.m. London time.
- The U.K.’s FTSE 100 Index declined 0.3 percent.
- Germany’s DAX Index climbed 0.1 percent to the highest on record.
- Spain’s IBEX Index gained 1.2 percent.
- Futures on the S&P 500 Index dipped 0.2 percent.
Currencies
- The Bloomberg Dollar Spot Index fell 0.2 percent, the largest fall in more than two weeks.
- The euro gained 0.2 percent to $1.1635.
- The British pound increased 0.2 percent to $1.3157.
Bonds
- The yield on 10-year Treasuries dipped one basis point to 2.39 percent.
- Germany’s 10-year yield fell one basis point to 0.38 percent, the lowest in more than a week.
- Britain’s 10-year yield climbed one basis point to 1.348 percent.
- Spain’s 10-year yield dropped six basis points to 1.53 percent.
Commodities
- West Texas Intermediate crude decreased 0.1 percent to $53.82 a barrel.
- Gold dipped 0.2 percent to $1,271.05 an ounce.
Asia
- Japan’s Topix index and the Nikkei 225 Stock Average closed flat in Tokyo.
- South Korea’s Kospi index gained 0.2 percent and Australia’s S&P/ASX 200 Index rose 0.3 percent.
- The Shanghai Composite Index fell 0.8 percent. The Hang Seng Index in Hong Kong declined 0.1 percent.
- China’s 10-year yield climbed 6 basis points to 3.90 percent, touching the highest since 2014.
- The Japanese yen rose 0.1 percent to 113.57 per dollar.
By Robert Brand — With assistance by Adam Haigh
October 30, 2017, 8:41 PM GMT+11
Source: Bloomberg