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Sydney - European stocks drifted following a mixed session in Asia and the dollar climbed as investors awaited the US inflation report for clues on the pace of Federal Reserve policy-tightening. Treasury yields edged higher and oil slipped.
The Stoxx Europe 600 Index traded little changed after six days of gains. Earlier, Japanese stocks fluctuated before closing higher, while Hong Kong and Chinese shares slipped.
Australian equities slid, weighed by banks and miners. Futures for the S&P 500 rose. The yen weakened as investors digested the political fallout from a scandal embroiling Japanese Finance Minister Taro Aso. The US 10-year yield inched up to 2.88% after Monday’s Treasury auction was broadly in line with expectations.
All eyes will be on the US inflation data as traders try to second guess the path of monetary tightening in the world’s biggest economy. A figure that misses or meets estimates is likely to reaffirm the case for three rate hikes this year and give the green light to fresh appetite for risk assets.
Politics also remain in focus after President Donald Trump issued an executive order blocking Broadcom from acquiring Qualcomm, scuttling a $117bn hostile takeover that had been the subject of scrutiny over the deal’s threat to US national security.
Here are some of the key things happening this week:
• China data on industrial production, retail sales and fixed-asset investment all out on Wednesday are likely to point to slower growth, according to Bloomberg Economics forecasts.
• Key indicators for the Fed dominate the economic agenda in the coming week.
• Headline inflation may have edged up to 2.2% in February from 2.1%, though consensus before Tuesday’s report is for core inflation to remain at 1.8%.
• Prices and factory output are focal points in the eurozone.
• Also this week, Germany’s Angela Merkel is inaugurated to a fourth term, EU27 government officials discuss the European Union’s Brexit position, and UK Chancellor of the Exchequer Philip Hammond issues his spring statement.
And these are the main moves in markets:
Stocks
• The Stoxx Europe 600 Index fell 0.1% as of 09:05, the first retreat in more than a week.
• Futures on the S&P 500 Index gained 0.1% to the highest in almost six weeks.
• The MSCI Asia Pacific Index increased 0.1% to the highest in two weeks.
• The UK’s FTSE 100 Index decreased 0.1%.
• The MSCI Emerging Market Index jumped 0.2% to the highest in more than five weeks.
Currencies
• The Bloomberg Dollar Spot Index gained 0.2%.
• The euro dipped 0.1% to $1.2318.
• The British pound decreased 0.1% to $1.3891.
• The Japanese yen declined 0.5% to 106.98 per dollar, the weakest in two weeks.
• The rand declined 0.2% to R11.84 per dollar.
• The MSCI Emerging Markets Currency Index fell 0.1%.
Bonds
• The yield on 10-year Treasuries increased one basis point to 2.88%.
• Germany’s 10-year yield climbed less than one basis point to 0.63%.
• Britain’s 10-year yield was unchanged at 1.494%, the highest in a week.
Commodities
• West Texas Intermediate crude decreased 0.3% to $61.15 a barrel.
• Gold decreased 0.4% to $1 318.10 an ounce, the weakest in more than a week.
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