European shares headed lower after sharp declines in the U.S. and Asia. Treasuries and the dollar steadied as traders awaited a second appearance from Federal Reserve Chairman Jerome Powell, whose comments riled markets earlier this week.
Retailers and media companies were among the biggest losers in the Stocks Europe 600 Index. S&P 500 Index futures signaled the underlying gauge will open higher after its worst month in two years. Spot gold headed for the lowest close in almost two months on the expectation of higher interest rates, and West Texas Intermediate crude was set for the first advance in three days. The 10-year Treasury yield held below 2.9 percent and German bund yields were little changed.
Market participants will keep a close eye on Powell’s second day of testimony after he painted an upbeat picture of the U.S. economy on Tuesday. His comments opened the door to speculation the central bank plans to quicken the pace of monetary tightening, a move investors like Bridgewater Associates Inc. President Ray Dalio warn could hamper growth.
Elsewhere, the U.K. pound was little changed after the European Union published a draft Brexit treaty, squaring off with Prime Minister Theresa May. The Australian dollar dropped after business investment unexpectedly fell in the final three months of last year.
Here are some key events scheduled for this week:
Fed’s Powell testifies before the Senate Banking Committee Thursday. Other Fed speakers this week are Bill Dudley.
U.K. Prime Minister Theresa May delivers a speech Friday on Britain’s relationship with the European Union.
These are the main moves in markets:
The Stoxx Europe 600 Index declined 0.3 percent as of 8:05 a.m. London time.
The MSCI All-Country World Index fell 0.2 percent to the lowest in more than two weeks.
Futures on the S&P 500 Index gained 0.2 percent.
The U.K.’s FTSE 100 Index declined 0.7 percent to the lowest in more than two weeks on the largest drop in almost three weeks.
The Bloomberg Dollar Spot Index increased 0.1 percent to the highest in six weeks.
The euro gained less than 0.05 percent to $1.2197.
The Japanese yen dipped 0.2 percent to 106.86 per dollar.
South Africa’s rand sank 0.4 percent to 11.8485 per dollar, the weakest in more than two weeks.
The British pound fell 0.1 percent to $1.3748, the weakest in almost seven weeks.
The yield on 10-year Treasuries gained less than one basis point to 2.86 percent.
Germany’s 10-year yield fell less than one basis point to 0.65 percent, the lowest in almost five weeks.
Britain’s 10-year yield declined six basis points to 1.501 percent, the lowest in a month on the largest fall in almost two weeks.
West Texas Intermediate crude advanced 0.2 percent to $61.75 a barrel.
Gold decreased 0.5 percent to $1,312.29 an ounce, the weakest in two months.
LME copper declined 0.1 percent to $6,927.00 per metric ton, the lowest in more than two weeks.