Stocks rose in Europe while U.S. index futures turned higher on Wednesday following a mixed session in Asia as investors weighed a host of potential headwinds to looming trade talks between the world’s two biggest economies. Treasuries were steady.
- The Stoxx Europe 600 shifted from losses to gains just after the open.
- Futures on the S&P 500 advanced following two days of declines in the underlying index.
- Benchmark equity gauges fell across Asia except for those in Shanghai and Mumbai
- Treasury 10-year yields were little changed, not far from their lowest in a month.
- Gold nudged higher
Worldwide holdings in gold-backed ETFs have expanded for 17 days in a row
High-level U.S.-China trade talks are set to resume in Washington on Thursday even as relations have deteriorated between the two countries.
The Trump administration Tuesday slapped visa bans on Chinese officials linked to the mass detention of Muslims in Xinjiang province, after putting a number of Chinese technology firms on a blacklist the day before.
Bloomberg reported the White House is moving ahead with discussions about restricting U.S. government pension investments in China.
China, meantime, said it would retaliate against the blacklisting of companies and separately has taken steps against the U.S. National Basketball Association in wake of a flap over a team manager’s remarks on Hong Kong.
“It will be interesting to see how it plays out this week between the U.S. and China,”
said Andrew Balls, chief investment officer for global fixed income at Pacific Investment Management Co.
This comes “at a time when we already see growth pretty weak in the first half of next year and you have at least some evidence of weakness in manufacturing spilling into services,”
The U.S.-China flare-up overshadowed comments by Federal Reserve Chairman Jerome Powell, who indicated Tuesday that the central bank will move to address recent strains in money markets.
Powell left his options open on interest rates.
Minutes of the Fed’s last rates meeting will be released tonight, providing further insight into policy makers’ thinking ahead of their next meeting at the end of the month.
In Medium Term, Can See Yields Moving Lower From Here, Says BlackRock’s Seth
Neeraj Seth, managing director and head of Asian credit at BlackRock, discusses the U.S.-China trade negotiations and their impact on markets.
He speaks on “BloombergMarkets:
Elsewhere, the yuan edged up after a stronger than expected fixing of the daily reference rate. West Texas crude fell toward $52 a barrel. Turkey’s lira was steady as the government said its military will cross the border into Syria “shortly.”
Here are some key events coming up this week:
- On Wednesday, minutes will be released from the last policy meeting of the Fed’s rate-setting committee.
- The account of the European Central Bank’s last gathering is due Thursday.
- Chinese President Xi Jinping is scheduled to meet Indian Prime Minister Narendra Modi on Friday and Saturday for an informal summit.
- The U.S. releases a key measure of inflation on Thursday.
Here are the main moves in markets:
- The Stoxx Europe 600 Index increased 0.2% as of 8:34 a.m. London time.
- Futures on the S&P 500 Index rose 0.3%.
- The U.K.’s FTSE 100 Index gained 0.3%.
- The MSCI All-Country World Index was little changed.
- The MSCI Emerging Market Index fell 0.3%.
- The Bloomberg Dollar Spot Index declined 0.1%.
- The euro rose 0.2% to $1.0978.
- The British pound increased 0.1% to $1.2231.
- The Japanese yen weakened 0.1% to 107.19 per dollar.
- The yield on 10-year Treasuries gained one basis point to 1.53%.
- The yield on two-year Treasuries dipped less than one basis point to 1.42%.
- Britain’s 10-year yield rose three basis points to 0.442%.
- Germany’s 10-year yield gained two basis points to -0.58%.
- Japan’s 10-year yield decreased less than one basis point to -0.202%.
- West Texas Intermediate crude dipped 0.2% to $52.54 a barrel.
- Gold increased 0.3% to $1,509.46 an ounce, the highest in more than two weeks.
- Iron ore sank 3.8% to $86.28 per metric ton.
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