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Sydney - Stocks extended declines at the start of a week set to be dominated by the gathering of central bankers at Jackson Hole, amid growing unease about persistent low inflation. The dollar, gold and yen all gained.
The Stoxx Euro 600 Index retreated a third day on thin trading volumes after benchmarks in Tokyo, Seoul and Sydney also fell. US equity futures also dropped, signaling the S&P 500 may resume declines after a tumultuous week for President Donald Trump’s administration.
Meanwhile, investors remain on edge after a terror attack in Barcelona and amid simmering tensions on the Korean peninsula. Gold resumed its trudge toward $1 300 per ounce, and oil slipped.
Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi will be among the officials addressing this year’s installment of the annual conference hosted by the Kansas City Fed.
The summit, held at a Wyoming mountain retreat, comes as central banks in advanced economies grapple with ending years of unprecedented monetary easing, even as stubbornly tepid inflation clouds the outlook.
“The key event this week is the Jackson Hole central bank policy forum which begins on Thursday,” Citigroup strategists including Peter Goves wrote in a note to clients. “The market spotlight will likely focus on Yellen, given the generally low US inflation environment and the likelihood of Fed balance sheet reduction occurring relatively soon.”
Among the key events this week:
• Before heading to Jackson Hole, ECB’s Draghi will give a speech on Germany on Wednesday.
• Minutes from the Governing Council’s July meeting released last week showed that officials are still uncertain how to signal changes in their policy settings.
• Thailand’s economy grew faster than expected in the second quarter, with GDP expanding 3.7% from a year earlier.
• Other economic releases this week include sales of new US homes in July, Taiwan July industrial production, Malaysia July CPI, UK second-quarter GDP, New Zealand July trade data and Japan July CPI.
• Indonesia is among central banks to hold monetary-policy meetings.
• US-South Korea military drills are scheduled to begin.
• Philippines markets are closed for a holiday on Monday.
Here are the main moves in markets:
Asia
• Japan’s Topix index fell 0.1% at the close with volume was about 16% below the 30-day intraday average.
• South Korea’s Kospi index lost 0.1%.
• Australia’s S&P/ASX 200 Index dropped 0.4%, with BlueScope Steel tumbling as much as 23% after the company reported disappointing earnings.
• Hong Kong’s Hang Seng Index added 0.5% and the Shanghai Composite Index was up 0.4%.
• The MSCI Asia Pacific Index slid 0.2%.
Stocks
• The Stoxx Europe 600 Index sank 0.3% as of 09:34.
• The MSCI All-Country World Index declined 0.1% to the lowest in almost five weeks on a closing basis.
• Germany’s DAX Index tumbled 0.5%.
• The UK’s FTSE 100 Index dipped 0.3% to the lowest in 14 weeks.
• The MSCI Emerging Market Index climbed 0.3%.
• Futures on the S&P 500 Index fell 0.2% to the lowest in almost six weeks.
Currencies
• The euro dipped 0.2% to $1.1738.
• The Bloomberg Dollar Spot Index advanced 0.1%.
• The British pound declined 0.1% to $1.2861, the weakest in five weeks.
• The Japanese yen climbed 0.2% to 108.99 per dollar, the strongest in almost four months.
Bonds
• The yield on 10-year Treasuries fell one basis point to 2.19%.
• Germany’s 10-year yield declined one basis point to 0.41%.
• Britain’s 10-year yield decreased one basis point to 1.08%.
Commodities
• Gold advanced 0.3% to $1 288.28 an ounce.
• West Texas Intermediate crude declined 0.2% to $48.41 a barrel.
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