< Back to News

Stocks Edge Higher With Treasuries Dollar Steady

Financial_Markets_3

European stocks and U.S. equity futures edged higher on Wednesday after a lackluster Asian session, with investors largely treading water as they await the next developments on trade. The euro slipped and the pound drifted.

The Stoxx Europe 600 Index opened in the green as most sectors rose. Equities in Italy and Spain underperformed. After a choppy session for the underlying gauge on Tuesday, futures for the S&P 500 Index pointed to an advance at the open. Shares in Japan and Australia set the pace as the MSCI Asia Pacific Index climbed, though stocks in Shanghai dropped for a second day.

The pound was little changed as traders digested news that the deadline for a Brexit deal may slip. Gilts were range-bound along with most European bonds as 10-year Treasury yields retreated further below 2.90 percent. The euro edged lower after the Italian government was said to be askingthe European Central Bank to pass a new program of bond purchases to protect the country’s debt.

Markets appear to lack some conviction as the Northern hemisphere’s traditional vacation period grinds to a close. U.S. stocks remain at an all-time high, while the rest of the world has been playing a gradual game of catch-up. However risks abound, from legal threats to President Trump’s administration and turmoil in emerging markets to ongoing trade tension between the world’s major economies.

“We don’t know where China is on this,” David Ader, chief market strategist at Informa Financial Intelligence, said on Bloomberg Television. “I tend to be more pessimistic that we are going to come away with trade deals that are going to make everybody satisfied, but we are trading headlines, we are trading the sensitivity to those headlines, so for the moment it looks good.”

Elsewhere, the Canadian dollar advanced after a reportthe country was ready to make concessions on its dairy market to be included in any North American trade deal. The Australian dollar dropped with bond yields as expectations for central bank interest-rate increases were slashed.

Key events coming up this week:

• The U.S. economy probably grew in the second quarter at a slightly slower pace, economists predict ahead of Wednesday’s second reading.

• Earnings are due from companies including Pernod Ricard and Dollar General.

• China’s official factory PMI are due Friday.

• The Bank of Korea sets policy on Friday. Weak jobs growth has cooled speculation of an interest-rate increase.

Main moves in markets:

Stocks

• Futures on the S&P 500 Index climbed 0.1 percent as of 8:16 a.m. London time to the highest on record.

• The Stoxx Europe 600 Index gained 0.2 percent to the highest in almost three weeks.

• The U.K.’s FTSE 100 Index increased 0.1 percent to the highest in more than two weeks.

• Germany’s DAX Index jumped 0.2 percent to the highest in almost three weeks.

• The MSCI Asia Pacific Index jumped 0.2 percent to the highest in almost three weeks.

• The MSCI Emerging Market Index fell 0.1 percent.

Currencies

• The Bloomberg Dollar Spot Index increased less than 0.05 percent.

• The euro declined 0.1 percent to $1.168.

• The British pound fell less than 0.05 percent to $1.2872.

• The Japanese yen decreased less than 0.05 percent to 111.22 per dollar.

Bonds

• The yield on 10-year Treasuries declined one basis point to 2.87 percent.

• Germany’s 10-year yield was unchanged at 0.38 percent, the highest in three weeks.

• Britain’s 10-year yield declined less than one basis point to 1.449 percent, the largest fall in more than a week.

• The spread of Italy’s 10-year bonds over Germany’s increased one basis point to 2.8121 percentage points to the biggest premium in more than a week.

Commodities

• West Texas Intermediate crude fell less than 0.05 percent to $68.50 a barrel.

• Gold climbed 0.3 percent to $1,204.27 an ounce.

Source: Bloomberg