Dollar Jumps Ahead of Jackson Hole; Stocks Mixed

The dollar rallied for the first day in six as investors awaited a meeting of global central bankers after the Federal Reserve signaled no change to its pace of monetary policy tightening. Asian stocks traded mixed.

The greenback climbed against all its Group of 10 trading partners. The Australian dollar fell most against its U.S. counterpart and bond yields slipped as Prime Minister Malcolm Turnbull is fighting to keep his leadership. The 10-year Treasury yield held declines after the Fed indicated in meeting minutes a readiness to hike again if the economy stays on track. Australian stocks fell, with banks among the worst performers, and Japan was little changed. Shares fell in Hong Kong and rose in China. European equity futures declined.

While U.S. stocks remain close to all-time highs amid double-digit corporate profit growth, traders are keeping an eye on the legal drama engulfing President Donald Trump as well as the resumption of trade negotiations between the U.S. and China. China said it will file complaints against the U.S. with the World Trade Organization just as 25 percent of tariffs on $16 billion of Chinese goods came into effect.

Investors are also focused on comments from Fed chairman Jerome Powell later this week when he speaks at a meeting of central bankers in Jackson Hole, Wyoming.

“With economic data mostly cooperating with the Fed’s base message of continued rate increases driven by tight labor markets, above trend growth and bubbling inflation, it is unlikely that Powell will drastically stray from this message,” BNY Mellon senior global market strategist Marvin Loh said in a note. Powell may provide more details on the neutral rate, curve inversion and balance sheet process, Loh wrote.

Elsewhere, oil steadied after surging on a U.S. government report that showed the biggest decline in crude inventories since late July. Gold declined and fell below $6,000 a metric ton.

Key events coming up this week:

• Companies announcing earnings include Alibaba and China’s Bank of Communications.

• Central bankers gather at the Kansas City Fed’s annual Jackson Hole symposium, where Powell speaks Friday.

• Euro area preliminary PMI data for August is due on Thursday.

Main moves in markets:

Stocks

• Japan’s Topix index was virtually unchanged at the 3 p.m. close in Tokyo.

• Australia’s S&P/ASX 200 Index fell 0.2 percent with trading volumes about 85 percent higher than the 30-day average amid the unfolding political drama.

• South Korea’s Kospi index rose 0.4 percent.

• Hong Kong’s Hang Seng Index lost 0.3 percent.

• Shanghai Composite Index gained 0.6 percent.

• S&P 500 Index futures ticked lower. The index fell less than 0.1 percent Wednesday.

• FTSE 100 Index futures fell 0.2 percent as of 7:05 a.m. in London.

Currencies

• The yen fell 0.3 percent to 110.87 per dollar.

• The offshore yuan lost 0.4 percent to 6.8712 per dollar.

• The Bloomberg Dollar Spot Index rose 0.4 percent.

• The euro declined 0.3 percent to $1.1558.

• The Aussie plunged 0.8 percent to 72.93 U.S. cents.

Bonds

• The yield on 10-year Treasuries held at 2.82 percent.

• Australia’s 10-year bond yield fell one basis point to 2.53 percent.

Commodities

• West Texas Intermediate crude was steady at $67.87 a barrel after jumping 3.1 percent.

• Gold fell 0.3 percent to $1,191.61 an ounce.

• LME copper dropped 0.9 percent to $5,952 a metric ton.

Source: Bloomberg