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London - European stocks advanced as the euro and dollar traded sideways before Janet Yellen and Mario Draghi speak in Jackson Hole. Commodities showed more conviction, with most raw materials climbing.
Stocks across Europe fluctuated before edging higher, with gains for miners outweighing retailer declines in the Stoxx Europe 600 Index. The Bloomberg Commodity Index was in the green for a third day.
Crude traded near $48 a barrel as Hurricane Harvey headed for Texas. Sovereign debt fell across Europe, while the euro traded flat after sliding against the dollar earlier as data showed German corporate confidence weakened.
Jackson Hole Bingo! Play Along to Avoid Jargon-Induced Lethargy
In a week when traders have had little to go on and the Northern Hemisphere summer has suppressed volumes, equity markets have struggled for traction as investors await the forum in Jackson Hole, Wyoming.
Though European Central Bank President Draghi isn’t expected to offer a fresh policy message, his speech and that of Federal Reserve chair Yellen will be parsed for clues on the timing of reductions in stimulus.
Meanwhile, two Fed officials offered opposing views on Thursday on the inflation debate. Kansas City’s Esther George said another rate hike is feasible this year if US data holds up. Dallas’s Robert Kaplan called for patience in waiting for prices to go higher.
"Will financial-stability concerns prompt the Fed to hike, even when inflation is so low? This is what the market wants to know," John Cairns, a strategist at Rand Merchant Bank in Johannesburg, wrote in a client note.
"With little else to focus on, the market has morphed the symposium into a colossus. Risks are two-way: Yellen could take the hike off the table, or reaffirm it."
Beyond the gathering of central bankers, market risks may be building in Washington. President Donald Trump took to Twitter to fuel the debate on legislation to keep the US government open next month. Trump blasted Republican leaders for ignoring his advice on raising the debt ceiling and creating a "mess."
Countering, House Speaker Paul Ryan said the borrowing limit will be raised. Rates on short-term Treasury bills spiked amid concern Congress and the White House may not act in time.
Among other key events looming this week:
Indian markets are closed for a holiday. Yellen is scheduled to discuss financial stability at 10am New York time on Friday at the Kansas City Fed’s symposium in Jackson Hole. Draghi is set to speak at 3pm.
Here are the main moves in markets:
Stocks
The Stoxx Europe 600 Index increased 0.2% as of 10:22am in London. The MSCI World Index of developed countries climbed less than 0.05%. Futures on the S&P 500 Index advanced less than 0.05%.
Currencies
The Bloomberg Dollar Spot Index decreased 0.1%. The euro rose less than 0.05% to $1.1801 The British pound increased 0.1% to $1.2818.
Bonds
The yield on 10-year Treasuries advanced less than one basis point to 2.20%. Britain’s 10-year yield climbed two basis points to 1.068%. Germany’s 10-year yield increased two basis points to 0.40%, the first advance in more than a week.
Commodities
West Texas Intermediate crude gained 0.7% to $47.75 a barrel. Gold advanced 0.1% to $1 287.76 an ounce. Copper climbed 0.4% to $6718.00 per metric ton, the highest in almost three years.
Asia
Japan’s Topix index closed 0.3% higher with volume on the gauge about 20% below its 30-day intraday average.
The S&P/ASX 200 Index in Sydney fluctuated before finishing little changed and South Korea’s Kospi index rose 0.1%.
The Hang Seng Index in Hong Kong added 1% and the Shanghai Composite Index advanced 1.7%.
The MSCI Asia Pacific Index rose 0.2%.
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