Publications
Partners
London - Stocks declined globally on Monday as investors braced for a week packed with risk events, from central bank decisions to Brexit talks to a G-20 gathering. Commodities were weaker across the board, the dollar reversed an advance and Treasury yields rose.
The Stoxx Europe 600 Index headed for the first decline in three days as technology companies slumped with miners, with almost every industry group in the red.
The MSCI Asia Pacific Index of stocks also fell, with tech shares also under pressure as Apple appeared poised to disrupt its supply chain. The yen fluctuated amid a drop-in support for Japanese Prime Minister Shinzo Abe’s cabinet, which has championed currency weakness. Core European government bonds followed Treasuries lower. Gold dropped.
The biggest focus for global markets this week will be the first US interest rate decision under the Federal Reserve’s new Chairman Jerome Powell. It comes just weeks after he hinted to investors that he’s open to lifting the policy rate four times this year, rather than the three currently reflected in dot-plot forecasts.
Some Wall Street banks such as Goldman Sachs expect the median projection to rise to four on Wednesday, while others say there will be no change following a round of mediocre data and policy makers’ stated intentions to move gradually.
Trade tensions also remain in the spotlight as US Treasury official David Malpass said he misspoke hours after claiming the US was pulling out of decade-old formal economic talks with Beijing. Meanwhile, investors are assessing the implications of a new head at China’s central bank.
Elsewhere, the rouble weakened for a sixth day, the longest losing streak since October, as Russian President Vladimir Putin won a landslide victory in a tightly controlled election. Bitcoin recovered to trade back above $8 000 after tumbling as much as 13% from Friday. West Texas oil fell toward $62 a barrel.
Here are some key calendar events coming up this week:
• The Fed decision and Powell’s news conference come on Wednesday.
• The Bank of England is expected to keep interest rates and its asset-purchase programme unchanged on Thursday.
• Attention will be on language and the odds for a May hike.
• Saudi Crown Prince Mohammed bin Salman is expected to meet with President Donald Trump at the White House this week as part of a US visit.
• Company earnings scheduled for this week include Tencent, FedEx, Porsche, Hermes, PetroChina, Nike, Enel and Oracle.
And these are the main moves in markets:
Stocks
• The Stoxx Europe 600 Index declined 0.6% as of 11:39.
• Futures on the S&P 500 Index decreased 0.5% to the lowest in more than a week.
• The MSCI Asia Pacific Index dipped 0.6%.
• The UK’s FTSE 100 Index sank 1.3% on the biggest tumble in more than two weeks.
• The MSCI Emerging Market Index decreased 0.5% on the largest dip in two weeks.
Currencies
• The Bloomberg Dollar Spot Index decreased 0.1%.
• The euro advanced less than 0.05% to $1.2296.
• The British pound climbed 0.6% to $1.4032, the strongest in more than a month on the biggest increase in more than a month.
• The Japanese yen dipped 0.1% to 106.09/$.
• The rand sank 0.4% to R12.02, the weakest in more than five weeks.
• The MSCI Emerging Markets Currency Index declined 0.1% to the lowest in two weeks.
Bonds
• The yield on 10-year Treasuries gained two basis points to 2.86%.
• Germany’s 10-year yield rose one basis point to 0.58%.
• Britain’s 10-year yield climbed three basis points to 1.429%, the biggest surge in almost three weeks.
Commodities
• West Texas Intermediate crude decreased 0.3% to $62.14 a barrel.
• Gold fell 0.2% to $1 311.82 an ounce, the weakest in 11 weeks.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
