U.S. Futures Trim Gain, Dollar Pares on Inflation: Markets Wrap




 

(Bloomberg) -- U.S. stock futures pared gains and Treasuries retreated after the latest American inflation reading came in higher than anticipated. The dollar trimmed some of its drop and gold slipped.

Contracts for the S&P 500 came off their highs, but the gauge still looked poised to test 3,000 again as investors weigh the latest clues on the path for monetary policy. The Stoxx Europe 600 Index edged higher, attempting its first advance in five days as energy companies climbed. Shares rallied across most of Asia, with the South Korean and Hong Kong markets outperforming and stocks in China edging higher.

Emerging-market equities jumped alongside developing-nation currencies, while the pound continued its rebound from a two-year low as the greenback fell. European government bonds were mixed.

This year's rallies across stocks, bonds and credit got a fresh jolt on Wednesday thanks to comments from Fed Chairman Powell that persuaded investors rates are headed lower by at least a quarter-point in July. Minutes from the central bank's last meeting further cemented expectations for a cut in borrowing costs. Traders will be eyeing Powell's testimony before the Senate Banking Committee on Thursday for further clues after a measure of U.S. consumer prices rose more than forecast in June.

"There has been a total shift in monetary policy -- quantitative tightening is off the table and we're back to some mild form of quantitative easing or stable central bank balance sheets," said Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs. "That's very supportive for equities."

Here are some key events coming up:

Powell testifies to Senate Banking Committee on Thursday.U.S. producer prices are due on Friday.

Here are the main moves in markets:

Stocks

Futures on the S&P 500 Index gained 0.2% as of 8:41 a.m. New York time to the highest on record.The Stoxx Europe 600 Index rose 0.1%, the first advance in a week and the biggest advance in more than a week.The U.K.'s FTSE 100 Index dipped 0.1%, hitting the lowest in more than a week with its sixth consecutive decline.The MSCI Emerging Market Index increased 0.7%, the biggest climb in more than a week.The MSCI Asia Pacific Index increased 0.7%, the largest climb in more than a week.

Currencies

The Bloomberg Dollar Spot Index dipped 0.2%, the lowest in a week.The euro climbed 0.2% to $1.1274, the strongest in a week.The British pound climbed 0.5% to $1.2566, the strongest in a week on the biggest increase in more than three weeks.The Japanese yen gained 0.2% to 108.19 per dollar, the strongest in a week.

Bonds

The yield on 10-year Treasuries climbed two basis points to 2.08%, the highest in more than three weeks.Britain's 10-year yield jumped six basis points to 0.822%, the highest in almost two weeks on the largest surge in 14 weeks.

Commodities

West Texas Intermediate crude climbed 0.1% to $60.51 a barrel, reaching the highest in seven weeks on its sixth straight advance.Gold dipped 0.3% to $1,415.37 an ounce.

--With assistance from Ruth Carson, Chester Yung, Cormac Mullen and Gregor Stuart Hunter.

To contact the reporter on this story: Laura Curtis in London at lcurtis7@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Yakob Peterseil

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

©2019 Bloomberg L.P.

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