Publications
Partners
Cape Town - Stocks in Europe were mixed and the euro gained as investors await the next development in Spain’s Catalan crisis. Treasuries and the dollar were steady before the Federal Reserve’s policy meeting this week, which comes as President Donald Trump prepares to name the central bank’s next chairman.
The Stoxx Europe 600 Index nudged lower as a drop in mining shares offset gains for technology and telecommunications stocks. Markets showed little sign of unease as the government in Madrid began the process of reasserting control after Catalonia’s declaration of independence, with Spanish stocks outperforming and the country’s bonds gaining.
Debt of other peripheral nations also climbed after S&P Global ratings upgraded Italy’s credit on Friday. WTI crude rose to a six-month high as Saudi Arabia’s crown prince backed extended output cuts by Opec.
Profit reports due this week from some of the world’s largest companies may show if there’s enough juice in the earnings season to propel leg higher for global shares. Speculation continues around who US President Donald Trump will choose as the next Fed chair, with Governor Jerome Powell said to be the front-runner.
Elsewhere, equity benchmarks fluctuated in Japan, while Chinese shares fell, with the Shanghai Composite Index tumbling the most in more than two months as the nation’s bond slump deepened amid mounting deleveraging concerns.
The slide in Chinese stocks came after a period of calm through the recent Communist Party Congress, as sovereign bonds extended a monthly rout amid concern the government will step up efforts to reduce leverage in the financial sector.
Early signs are also surfacing that economic data may weaken, after solid figures for most of this year buoyed equities. That largely overshadowed gains on Wall Street on Friday after US gross domestic product added to evidence of an improving global economy.
Earnings are coming thick and fast. HSBC Holdings reported a third-consecutive quarterly increase in revenue on Monday. Three of China’s big four banks also report on Monday, after China Construction Bank earnings last week fuelled optimism that interest margins and asset quality are improving.
Sinopec and PetroChina probably improved earnings in the third-quarter as higher oil prices helped refining margins, analysts said. Their results are in focus after Exxon and Chevron each posted double-digit profit increases on Friday.
On the US political scene, developments in Washington will be closely watched after a grand jury approved the first charges stemming from special counsel Robert Mueller’s probe into Russian meddling in the 2016 election and possible collusion with Donald Trump’s election campaign, according to multiple news reports.
Here are some key upcoming events this week:
Trump has said he’ll reveal his choice to lead the Fed by Friday. The US central bank’s next rate decision is on Wednesday, with economists expecting policy makers to hold rates for now and to increase them at the December meeting. The US October payroll report comes out on Friday.
On Monday, personal income and spending data comes out, which features the Fed’s preferred inflation gauge. Trump starts an 11-day trip to Asia, his first as president, on Friday. Trade and security issues - particularly North Korea - will probably be in focus.
A week packed with earnings releases culminates with Apple results on Friday.
And these are the main moves in markets:
Asia
Japan’s Topix index and the Nikkei 225 Stock Average closed flat in Tokyo. South Korea’s Kospi index gained 0.2% and Australia’s S&P/ASX 200 Index rose 0.3%. The Shanghai Composite Index fell 0.8%. The Hang Seng Index in Hong Kong declined 0.1%.
China’s 10-year yield climbed 6 basis points to 3.90%, touching the highest since 2014. The Japanese yen fell less than 0.05% to 113.70 per dollar.
Stocks
The Stoxx Europe 600 Index fell 0.1% as of 8:15am London time. The UK’s FTSE 100 Index declined 0.3 percent. Germany’s DAX Index climbed 0.1% to the highest on record.
Spain’s IBEX Index gained 1.2%. Futures on the S&P 500 Index dipped 0.2%.
Currencies
The Bloomberg Dollar Spot Index decreased 0.1%. The euro increased 0.2% to $1.1626. The British pound gained 0.3% to $1.3164.
Bonds
The yield on 10-year Treasuries decreased less than one basis point to 2.40%. Germany’s 10-year yield climbed one basis point to 0.39%. Britain’s 10-year yield increased one basis point to 1.348%.
Commodities
West Texas Intermediate crude climbed 0.1% to $53.98 a barrel, the highest in more than six months. Gold dipped 0.3% to $1 270.00 an ounce.
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
