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European stocks slip as dollar halts two-day gain

May 10 2017 11:45
Robert Brand and Adam Haigh, Bloomberg

London - European shares slid with US index futures and the dollar fell for the first time in three days after Donald Trump fired FBI Director James Comey. Oil climbed following an industry report said to show a decline in American inventory.

The greenback dropped versus most major peers, and Federal Reserve Bank of Dallas President Robert Kaplan compounded the retreat with comments casting doubt on the pace of rate hikes in the world’s biggest economy. Treasuries advanced. Meanwhile, Roche Holding AG was the biggest drag on Europe’s Stoxx 600 Index after a cancer drug failed in a late-stage clinical trial.

The weakness across most markets comes in the wake of gains that sent global stocks to a record. Trump’s dismissal of Comey may threaten to undermine his administration as it attempts to move tax and spending plans through Congress, just as political risks ease in Europe and corporate earnings suggest the global economy is on the mend.

“All in all, this does not support the view that the US Trumpflation trade faces an easy road ahead of it,” Michael Every, head of financial markets research at Rabobank Group in Hong Kong, wrote in a note.

“It underlines that real surprises can pop up out of the box at any time right now.”

Here’s what investors will be scrutinizing:

Earnings are expected from companies including Deutsche Telekom and Snap, Toyota and SoftBank posted results after the close of Japanese markets. The Bank of England on Thursday publishes its interest-rate decision and quarterly Inflation Report.

Here are the main moves in markets:

Asia

Hong Kong shares jumped to a 21-month high and Chinese stocks traded there also surged, even as equities in Shanghai resumed a selloff.  South Korean stocks dropped from an all-time high following Moon Jae-in’s presidential victory, while the won retreated as Pyongyang pledged to push forward with another nuclear test.

Stocks

The Stoxx Europe 600 slipped 0.2% as of 10:33, after climbing 0.5% on Tuesday to the highest since August 2015. S&P 500 futures dropped 0.2%.

Currencies 

The Bloomberg Dollar Spot Index lost 0.2% after climbing 0.4% on Tuesday. The euro strengthened 0.1% to $1.0885, while the pound gained 0.4%.

Bonds

The yield on 10-year Treasury notes fell two basis points to 2.38%.  Benchmark German yields dropped one basis point to 0.42%, while French yields were down three basis points.

Commodities

Gold gained 0.2% to $1 222.77 an ounce. The metal dropped during the previous five sessions. West Texas oil climbed 1.1% to $46.40 a barrel, resuming gains after dropping 1.2% on Tuesday.

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european markets  |  equities  |  markets

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