European stocks steady; treasuries, gold advance

Sydney - European shares were steady following a late downswing in Asia, as markets struggled to find direction after last week’s rout. The dollar weakened against most major currencies and Treasuries edged higher with gold.

The Stocks Europe 600 Index traded little changed after a jump yesterday, while S&P 500 futures declined. The 10-year Treasury yield fell back after touching 2.89% and German bunds steadied.

Commodities found support from the weaker dollar, with Brent crude heading for the first advance in a eight sessions, and bullion set for back-to-back gains.

South Africa’s rand fluctuated as the country’s ruling African National Congress party decided to tell President Jacob Zuma to step down.

A jump in global equities yesterday wasn’t enough to put traders’ minds at ease that the volatility that wiped $2trn from US stocks last week has come to an end. US consumer-price data due on Wednesday could give some clues on direction, given that pressure on equities has been emanating from the outlook for inflation.

Hedge funds and other large speculators have boosted bets on Treasury futures to a record, indicating they expect the 2018 bond-market rout will resume in the days ahead. Terminal users can read more in our markets blog.

Here are some important things to watch out for this week:

Lunar new year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia. Chinese mainland markets are closed Feb. 15-21. India is out Tuesday for a public holiday.

The US consumer-price index probably increased at a moderate pace in January, economists project.

Retail sales in the US, also out on Wednesday, probably increased for a fifth straight month. Japan is expected to extend the longest stretch of economic growth since the mid-1990s when it reports fourth-quarter gross domestic product on Wednesday.

Earnings season continues in full swing with reports from Bunge, TripAdvisor, SunPower, Con Edison, Bombardier, MetLife, Cisco, Japan Post Bank, Credit Suisse, Nestle, Airbus, Allianz, Telstra and Coca-Cola.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index increased 0.1% as of 8:24am London time. The MSCI All-Country World Index gained 0.2%. The U.K.’s FTSE 100 Index advanced 0.2%.

Currencies

The Bloomberg Dollar Spot Index decreased 0.3% to the lowest in a week on the largest dip in more than a week. The euro advanced 0.3% to $1.2324, the strongest in a week. The British pound gained 0.2% to $1.3861. South Africa’s rand increased less than 0.05% to 11.9334 per dollar, the strongest in a week.

Bonds

The yield on 10-year Treasuries fell three basis points to 2.83%, the biggest drop in more than a week. Germany’s 10-year yield declined two basis points to 0.74%, the lowest in a week on the largest fall in a week.

Britain’s 10-year yield dipped one basis point to 1.601%.  

Commodities

West Texas Intermediate crude climbed 0.5% to $59.60 a barrel, the biggest increase in more than a week. Gold increased 0.4% to $1 328.48 an ounce, the highest in more than a week.

LME copper gained 1.3% to $6 918.50 per metric tonne, the highest in a week on the biggest rise in more than a week.