Publications
Partners
Dubai - European shares advanced, rebounding after three days of declines as rising bond yields spurred banks and increasing metal prices helped miners. US stock futures climbed on strong corporate earnings, and gold headed for the first drop in four days.
Most industry sectors rose as the Stoxx Europe 600 Index increased, with futures on the S&P 500 following suit after results from General Motors and Caterpillar beat estimates.
Emerging-market equities fell, taking a breather after gaining in 10 of the past 11 days. The greenback steadied before tomorrow’s Federal Reserve rate decision, and the euro once again flirted with its highest level in two years after German business confidence data beat expectations. Saudi Arabia’s promise to further cut crude exports spurred oil toward a second day advancing.
Markets this week are moving to the ebbs and flows of company- and industry-specific forces as investors brace for the Fed decision, when the central bank will weigh robust global growth against feeble inflation and mixed US economic data.
Expectations are for policy makers to keep rates on hold; clues to the fate of its balance sheet will be key.
“Any major policy announcement is more likely when Chair Janet Yellen faces the press following the September meeting,” J&E Davy analyst David McNamara wrote in a note.
“For now the Fed remain on track for a couple more rate hikes at least this year, with most members believing the recent softness in inflation to be temporary.”
Meanwhile, Greece returned to the bond market for the first time since 2014. The sub-investment grade rated country is seeking to sell five-year debt yielding about 4.75%, according to a person familiar with the transaction.
Here are some key events coming up this week:
• Post-Brexit trade talks between the UK and US are underway in Washington.
• Fed policy makers begin their meeting the same day, with a decision due on Wednesday.
• Nigeria’s central bank will probably hold rates today.
• The US Treasury Department will auction $26bn of notes due in two years. Donald Trump’s son and former Trump campaign chairperson Paul Manafort will go before Senate committees on Wednesday.
• The US economy probably gained traction in the second quarter as spending by American consumers picked up after a lull early this year.
• The gross domestic product report follows the two-day Fed policy meeting.
• Results from Facebook, Deutsche Bank, Nomura, BNP Paribas SA and UBS are among those expected this week.
Here are the main moves in markets:
Currencies
• The euro rose 0.3% to $1.1672 as of 14:01.
• The Bloomberg Dollar Spot Index dropped less than 0.1%.
• The British pound rose 0.3% to $1.3071, the strongest in more than a week.
• The Japanese yen fell 0.3% to ¥111.48/$, the first retreat in more than a week.
Stocks
• The Stoxx Europe 600 Index gained 0.8%, the biggest rise in almost two weeks.
• The MSCI All-Country World Index rose 0.2%.
• Germany’s DAX Index gained 0.7%, the biggest rise in almost two weeks.
• The MSCI Emerging Market Index fell 0.3%, the largest dip in more than two weeks.
• Futures on the S&P 500 Index added 0.2% after the underlying gauge slipped 0.1% on Monday.
Commodities
• Gold fell 0.4% to $1 250.23 an ounce, the largest dip in more than two weeks.
• West Texas Intermediate crude surged 1.7% to $47.13 a barrel, the biggest climb in more than three weeks.
• Iron ore rose 2.2% to 521 yuan per metric ton.
• Copper surged 2.6% to $2.81 a pound.
Bonds
• The yield on 10-year Treasuries rose two basis points to 2.28%, the highest in more than a week.
• Germany’s 10-year yield also added two basis points to 0.53%.
• Britain’s 10-year yield rose two basis points to 1.204%.
• France’s 10-year yield increased three basis points to 0.78%, the first advance in more than a week.
Asia
• The Australian dollar rose 0.3% after erasing an earlier decline.
• Attention turns to two key events on Wednesday: June quarterly inflation data and a speech on the labour market and monetary policy from Reserve Bank of Australia Governor Philip Lowe.
• Japan’s Topix index lost 0.3%.
• Australia’s S&P/ASX 200 Index added 0.7%.
• South Korea’s Kospi index retreated 0.5%.
• The Hang Seng Index was little changed while the Shanghai Composite Index slipped 0.2%.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
