Europe stocks trace Asia gain; US futures drift
Stocks in Europe and Asia climbed and US equity futures drifted as investors awaited the release of minutes from the latest meetings of two of the world’s key central banks. The dollar was steady and the yuan rose after a report America is asking China to keep its currency stable.
Miners and carmakers led the advance as the Stoxx Europe 600 Index erased Tuesday’s drop, while shares in South Korea and Hong Kong set the pace for gains in Asia. Contracts on the Dow Jones, S&P 500 and Nasdaq indexes were little changed, and Treasuries ticked lower. The yen dropped after Japan’s trade deficit came in wider than expected, and the pound slipped as Prime Minister Theresa May headed back to Brussels in a last-ditch attempt to save her Brexit deal.
With the US and China continuing tough negotiations toward a trade deal, focus has shifted to a key campaign promise made by President Donald Trump, namely addressing Beijing’s periodic devaluation of the yuan. Meanwhile, investors will also be preoccupied by the release of minutes from the Federal Reserve later on Wednesday and from the European Central Bank a day later.
The US stance on the yuan adds another layer to complex negotiations between the two camps in Washington that are scheduled to run through Friday. It is aimed at neutralizing any effort by Beijing to devalue its currency to counter American tariffs, people familiar with the ongoing talks said.
At the start of the year with the upshoot in equities, everything was sort of moving together, Peter Borish, chief strategist at Quad Capital LLC, told Bloomberg TVin New York. We are now starting to not see that and that is always the first sign of warning signals in the market place that it might be getting ready for a correction.
Elsewhere, gold traded near the highest since April amid increasing bullishness and palladium soared to a record as a shortage started to bite. West Texas crude oil traded above $56 a barrel in New York.
These are the main moves in markets:
The Stoxx Europe 600 Index advanced 0.5 per cent as of 8:21 am London time to the highest in 19 weeks. Futures on the S&P 500 Index increased less than 0.05 per cent to the highest in more than 11 weeks. The MSCIAll-Country World Index gained 0.3 per cent to the highest in 19 weeks. The MSCI Emerging Market Index jumped 1.1 per cent to the highest in two weeks on the biggest surge in almost three weeks.
The Bloomberg Dollar Spot Index increased less than 0.05 per cent. The euro gained 0.1 per cent to $1.135, reaching the strongest in two weeks on its fifth consecutive advance. The Japanese yen fell 0.2 per cent to 110.87 per dollar, the weakest in a week on the largest fall in a week. The Turkish lira decreased 0.3 per cent to 5.2962 per dollar. South Africas rand decreased 0.4 per cent to 14.1067 per dollar. The MSCI Emerging Markets Currency Index jumped 0.4 per cent to the highest in two weeks on the biggest increase in almost three weeks.
The yield on 10-year Treasuries advanced one basis point to 2.64 per cent. Germany’s 10-year yield dipped less than one basis point to 0.10 per cent. Britain’s 10-year yield declined one basis point to 1.164 per cent. The spread of Italy’s 10-year bonds over Germany’s climbed one basis point to 2.6945 percentage points.
The Bloomberg Commodity Index gained 0.2 per cent to the highest in almost 10 weeks. West Texas Intermediatecrude advanced 0.2 per cent to $56.21 a barrel, reaching the highest in more than three months on its sixth consecutive advance. LME copper climbed 0.3 per cent to $6,340.00 per metric ton, hitting the highest in more than 21 weeks with its sixth consecutive advance. Gold increased 0.2 per cent to $1,343.52 an ounce, reaching the highest in 10 months on its fifth consecutive advance.