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Dollar slips, stocks mixed before central bankers

Cape Town - The dollar slipped and European stocks were mixed as traders shifted focus from North Korea to a week packed with central-bank decisions, Federal Reserve speakers and economic data that will help illuminate the path of the global economy.

The Stoxx Europe 600 Index traded little changed, paring an earlier gain as the euro clawed back a drop against the dollar. The FTSE 100 fell as data showed Britain’s economy failing to recharge after a first-half slowdown.

The yen extended gains and Treasuries climbed amid lingering unease over North Korean plans for a ballistic missile launch, but gold declined as the risk-off trade softened. S&P 500 futures slipped before US markets reopen after the Labour Day holiday. West Texas crude rose a third day and copper extended its rally to a three-year high.

Investors are gearing up for a busy calendar of Fed speakers from today, while Mario Draghi may give more clarity on paring back the European Central Bank’s bond-buying program when he speaks after a rates decision on Thursday.

US durable-goods figures, the trade balance, unemployment claims, and the release of the Fed’s Beige Book will add to the global data mix after a purchasing managers’ index Tuesday indicated the euro area is poised for the fastest economic expansion in a decade.

US President Donald Trump agreed to support billions of dollars in new weapons sales to South Korea after North Korea’s largest nuclear test, while his ambassador to the United Nations said America would seek the strongest possible sanctions against Kim Jong Un’s regime. Tensions escalated after Asia Business Daily reported North Korea was preparing to fire an ICBM missile.

The key events coming this week:

• Among other economic numbers out of China, trade figures are anticipated to show another month of solid export growth, while FX reserves probably continued to rise on stricter capital controls, robust growth and a stronger yuan, according to Bloomberg Intelligence.

• Federal Reserve Board member Lael Brainard speaks on the economic outlook and monetary policy on Tuesday, which may help set the tone for the Fed’s September 20 policy decision.

• Among other Fed speakers this week are New York Fed President Bill Dudley and Dallas Fed President Robert Kaplan.

• The European Central Bank meets on Thursday.

• President Mario Draghi will express concern over the euro’s strength, but won’t say much about his asset-purchase program’s future, according to a survey.

And here are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index increased less than 0.05% as of 12:51.

• The UK’s FTSE 100 Index declined 0.1%.

• Germany’s DAX Index climbed 0.4% to the highest in more than a week. 

• Futures on the S&P 500 Index sank 0.3%.

Currencies

• The Bloomberg Dollar Spot Index declined 0.2% to the lowest in more than a week. 

• The euro increased less than 0.05% to $1.1901. 

• The British pound gained 0.2% to $1.2961.

• The Japanese yen climbed 0.4% to ¥109.32/$, the strongest in more than a week.

Bonds

• The yield on 10-year Treasuries fell three basis points to 2.13%.

• Germany’s 10-year yield dipped less than one basis point to 0.37%.

• Britain’s 10-year yield gained less than one basis point to 1.057%.

Commodities

• Gold dipped 0.1% to $1 332.46 an ounce. 

• West Texas Intermediate crude gained 1.4% to $47.94 a barrel, the highest in almost two weeks. 

• Copper increased 1.5% to $3.16 a pound, the highest in about three years.

Asia

• Japan’s Topix index fell 0.8% at the close, while South Korea’s Kospi index lost 0.1%.

• Australia’s S&P/ASX 200 Index rose 0.1%.

• Hong Kong’s Hang Seng Index fluctuated with indices higher in China and Singapore.

• The MSCI Asia Pacific Index was little changed. It slid 0.6% on Monday, the steepest drop since August 11. 

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