Stocks Rally Stalls as Treasuries Gain; Oil Drops: Markets Wrap




 

(Bloomberg) -- Stocks slipped globally on Wednesday alongside U.S. index futures amid signs the June revival in risk appetite may have overshot with trade concerns still lingering. Treasuries gained, and crude oil headed below $52 a barrel.

The Stoxx Europe 600 index opened lower for the first time in four sessions, after shares slipped across Asian markets. Hong Kong led losses as demonstrators forced road closures in the city, while stocks dipped less in Shanghai, Tokyo and Seoul. U.S. President Donald Trump said he's personally holding up a trade deal with China and won't complete the agreement unless Beijing returns to terms negotiated earlier in the year. The dollar drifted, while Treasuries added to earlier advances across the yield curve. Gold and the yen rose as risk appetite dissipated.

Just as investor concern over protectionism and global growth seemed to ease, Trump's latest salvos at China and the Federal Reserve introduced fresh uncertainty. With the president scowling at the central bank's "way too high" interest rates in a tweet on Tuesday, traders will next focus on European Central Bank President Mario Draghi's comments in Frankfurt and later on U.S. consumer-price data for clues on the institutions' policy paths.

"With no assurance that China will meet with the U.S. on the sidelines of the G-20 later this month, trade tensions continue to fuel market uncertainty," said Nema Ramkhelawan-Bhana, an economist at FirstRand Bank Ltd. in Johannesburg. "Yet, the growing probability of Fed cuts is counterbalancing trade concerns. The matter is crucial to global growth."

Elsewhere, WTI-grade oil futures fell back toward $52 a barrel in New York after an industry report showed U.S. oil inventories swelling further. Hong Kong's dollar climbed to the strongest level since December amid signs of tightening funding costs. Turkey's lira weakened modestly as traders pondered whether an interest-rate cut will come later Wednesday.

Here are some key events coming up:

The U.S. releases consumer prices for May on Wednesday.ECB President Mario Draghi speaks at a conference in Frankfurt on Wednesday.The race to succeed Theresa May heats up with the first Conservative Party leadership ballot Thursday.Euro-area finance ministers meet in Luxembourg Thursday. On the agenda: financial penalties for Italy over its debt load, and the euro-area budget.China and the U.S. release industrial production, retail sales data Friday.

And these are the main moves in markets:

Stocks

The Stoxx Europe 600 Index sank 0.5% as of 9:29 a.m. London time, heading for its first drop in four sessions.Futures on the S&P 500 Index declined 0.3%, in what would be the biggest dip in more than a week.Hong Kong's Hang Seng Index slipped 1.7%, the first retreat in more than a week and the largest tumble in almost five weeks.The MSCI Emerging Market Index dropped 0.4%, the biggest dip in almost three weeks.

Currencies

The Bloomberg Dollar Spot Index dipped less than 0.05%.The Japanese yen jumped 0.2%.The Hong Kong dollar climbed 0.1% to 7.8248 per U.S. dollar.The MSCI Emerging Markets Currency Index declined less than 0.05%.

Bonds

The yield on two-year Treasuries declined four basis points to 1.89%, the largest decrease in more than a week.Britain's 10-year yield declined two basis points to 0.84%.Germany's 10-year yield dipped less than one basis point to -0.24%.

Commodities

Iron ore declined 0.5% to $102.30 per metric ton.Gold increased 0.8% to $1,337.68 an ounce.West Texas Intermediate crude fell 2.4% to $51.99 a barrel on the biggest drop in a week.

--With assistance from David Wilson, Sarah Ponczek, Vildana Hajric, Cormac Mullen and Adam Haigh.

To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Robert Brand

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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