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Stocks drift in thin holiday trading; dollar dips

Jul 04 2019 14:43
Laura Curtis, Bloomberg

European equities were little changed alongside US stock futures on Thursday, as trading volumes slumped thanks to the American holiday. Gold slipped but stayed above $1 400 and WTI futures fell.

The Stoxx Europe 600 Index was flat, with deal activity and carmakers boosting the gauge while utilities weighed it down. Contracts on the S&P 500 Index also drifted after Asia’s benchmark finished higher overall thanks to gains in Japan and South Korea. Trading volumes were well below average across the board, with US markets shut and investors counting down to Friday’s American jobs report.

Core European bonds climbed, with German 10-year yields sliding below the European Central Bank’s deposit rate for the first time. Treasuries aren’t trading thanks to Independence Day. The dollar edged lower as President Donald Trump lobbed fresh accusations of currency manipulation at China and the European Union, while the euro strengthened following three days of declines.

Thursday’s holiday in the US is giving many investors a breather after a hectic few weeks in which bonds surged and stocks hit records as they tracked every twist in the trade war, tried to second guess central bankers and analyzed every data point. Next up, a US jobs report that will be closely monitored for clues on the Federal Reserve’s next move.

"Friday’s data is important to the extent that it will calibrate expectations for what the Fed could deliver later this month," said Ned Rumpeltin, European head of FX strategy at Toronto-Dominion Bank in London. "It is more about confirming the market’s current bias rather than setting fresh expectations."

On the currency-war front, Trump in a Twitter post Wednesday said China and Europe are playing a "big currency manipulation game" and "pumping money into their system" to compete with the US. He said America should match their efforts "or continue being dummies" who watch other countries manipulate currencies.

Here are some key events coming up:

  • US equity markets close Thursday for the Independence Day holiday.
  • The US jobs report is due Friday and is projected to show non-farm payrolls rose by 160 000 in June, rebounding from 75 000 the month prior.

Here are the main moves in markets:

Stocks

Futures on the S&P 500 Index increased less than 0.05% as of 12:55 London time.

The Stoxx Europe 600 Index gained 0.1%.

The Shanghai Composite Index decreased 0.3%.

The MSCI Emerging Market Index advanced 0.3%.

Currencies

The Bloomberg Dollar Spot Index decreased 0.1%.

The euro gained 0.1% to $1.1289, the biggest climb in more than a week.

The British pound gained 0.1% to $1.2582.

The onshore yuan jumped 0.1% to 6.872 per dollar.

The Japanese yen increased less than 0.05% to 107.77 per dollar.

Bonds

Germany’s 10-year yield declined two basis points to -0.40%.

Japan’s 10-year yield dipped one basis point to -0.155%.

Commodities

West Texas Intermediate crude declined 0.6% to $57.02 a barrel.

Iron ore decreased 3.5% to $113.94 per metric ton, the first retreat in more than a week and the biggest dip in more than 20 weeks.

Gold dipped 0.3% to $1 414.62 an ounce.

equities  |  markets  |  currencies
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