European shares rise, Asia extends drop
European stocks advance and Asian shares extend a losing streak as traders turn their focus to the outlook for monetary policy amid lingering worries for global trade
London: European stocks advanced on Wednesday and Asian shares extended a losing streak as traders turned their focus to the outlook for monetary policy amid lingering worries for global trade. Treasury yields edged lower after climbing a day earlier.
Energy companies and miners were among the biggest winners in Europe as Bloomberg’s commodity index rose. Futures on the Dow, S&P 500 and Nasdaq advanced even as America’s East Coast battened down for Hurricane Florence. The MSCI Asia Pacific Index was on course for a 10th consecutive decline, the longest losing streak since 2002. Two-year Treasury yields held near a decade high and the dollar edged lower. The euro slipped after a report that the European Central Bank is set to lower its economic growth forecasts, while the pound fluctuated as Britain attempts to foster an amicable split from the EU.
Central banks are back in the spotlight this week, with market participants increasingly preparing for the Fed to raise rates twice more in 2018, and policy meetings on the schedule for the European Central Bank and Bank of England, as well as Turkish and Russian central banks. Meanwhile, investors will be gauging the potential for extreme weather to disrupt economic activity, as threats from trade tension and Brexit negotiations linger.
“It’s pretty clear they would like get out of these negative rates,” Andrew Wilson, the global co-head of fixed income at Goldman Sachs Asset Management, said in interview with Anna Edwards of Bloomberg TV. “We’re still talking a year away -- it’s not imminent. If we see some continued tightening in the labor markets in Europe, that might be the catalyst for them to get back to zero. Again, we’re only getting back to zero.”
Elsewhere, emerging-market shares drifted lower while their currencies edged higher as India’s rupee jumped after an official said the government may announce measures to support the currency. Cryptocurrencies extended a collapse from a January high.
The Stoxx Europe 600 Index declined 0.1 percent as of 6:36 a.m. New York time. Futures on the S&P 500 Index climbed less than 0.05 percent to the highest in more than a week. The MSCI Asia Pacific Index sank 0.2 percent, hitting the lowest in 13 months with its 10th consecutive decline. The MSCI All-Country World Index increased less than 0.05 percent to the highest in a week. The MSCI Emerging Market Index fell 0.1 percent to the lowest in about 16 months.
The Bloomberg Dollar Spot Index sank 0.1 percent. The euro dipped 0.1 percent to $1.1593. The British pound decreased 0.1 percent to $1.3025. The Japanese yen gained 0.1 percent to 111.48 per dollar.
The yield on two-year Treasuries decreased one basis point to 2.73 percent. The yield on 10-year Treasuries declined one basis point to 2.96 percent. Germany’s 10-year yield dipped one basis point to 0.42 percent. The spread of Italy’s 10-year bonds over Germany’s fell three basis points to the narrowest in five weeks.
The Bloomberg Commodity Index increased 0.2 percent to the highest in more than a week. West Texas Intermediate crude gained 0.8 percent to $69.77 a barrel, the highest in more than a week. Gold decreased 0.2 percent to $1,196.63 an ounce. LME copper rose 1.2 percent to $5,931.50 per metric ton, the largest advance in almost three weeks.