Stocks slip with commodities, dollar strengthens

Sydney - European stocks started the week on the back foot, following a mixed session for Asian benchmarks, as mining companies dropped with commodities. The dollar gained against most major peers as Treasury yields rose.

The Stoxx Europe 600 Index headed for the first decline in three days as most of the region’s national benchmarks retreated. The MSCI Asia Pacific Index of stocks also fell, with technology shares under pressure after Apple was said to be making a significant investment in the development of next-generation MicroLED screens.

The yen strengthened as a nationwide survey showed a drop in support for Japanese Prime Minister Shinzo Abe’s cabinet, which has championed weakness in the currency. Most European government bonds followed Treasuries lower. Gold dropped.

The major focus for global markets this week will be the first US interest rate decision under the Federal Reserve’s new chairperson 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 Group 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, Bitcoin recovered to trade back above $8 000 after tumbling as much as 13% from Friday. Oil fell to around $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 program 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 fell 0.2% as of 8:10 am London time. Futures on the S&P 500 Index decreased 0.2% to the lowest in more than a week. The MSCI Asia Pacific Index dipped 0.6% to the lowest in more than a week on the largest decrease in more than a week. The UK’s FTSE 100 Index declined 0.5% to the lowest in two weeks.

The MSCI Emerging Market Index dipped 0.4% to the lowest in more than a week.

Currencies

The Bloomberg Dollar Spot Index gained 0.1% to the highest in almost three weeks. The euro sank 0.2% to $1.2268, the weakest in more than two weeks. The British pound fell less than 0.05% to $1.3938.

The Japanese yen climbed 0.1% to 105.93 per dollar, the strongest in more than two weeks. South Africa’s rand sank 0.6% to 12.0421 per dollar, the weakest in more than five weeks.

The MSCI Emerging Markets Currency Index declined 0.2% to the lowest in two weeks.

Bonds

The yield on 10-year Treasuries advanced two basis points to 2.87%, the highest in more than a week on the biggest gain in more than a week. Germany’s 10-year yield advanced one basis point to 0.58%, the first advance in more than a week.

Britain’s 10-year yield increased two basis points to 1.429%, the biggest increase in almost two weeks.

Commodities

West Texas Intermediate crude decreased 0.5% to $62.03 a barrel. Gold fell 0.4% to $1 308.92 an ounce, the weakest in 11 weeks.