Stocks Drift as Banks Retreat; Bonds, Oil Climb

EghtesadOnline: Stocks fluctuated and bonds advanced amid a cautious start to the week for markets, with the euro and dollar slipping as President Donald Trump tackled trade on his Asia tour. A crackdown on corruption in Saudi Arabia spurred oil.

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06 November 2017

The Stoxx Europe 600 Index swung between gains and losses, even as a European purchasing managers index indicated strong momentum at the start of the fourth quarter. Basic resource shares outperformed as the Bloomberg Commodity Index rose to the highest since March, but they were offset by retreating banks and telecom companies. News out of Asia was a dominant theme for many assets, with inflation comments from Bank of Japan Governor Haruhiko Kuroda, remarks on excessive leverage from his Chinese counterpart Zhou Xiaochuan and the grievances on trade from Trump. The yen declined before erasing the loss, and stocks in the region were mixed, Bloomberg reported.

Ahead of a light week for economic data releases investor focus has turned to Asia and the U.S. president’s visit to the region. Trump has already brought up trade grievances about both China and Japan and has warned nations against challenging the U.S. He goes on to South Korea and China this week. Elsewhere, sterling rebounded as the U.K. and European Union prepare for Brexit talks to resume.

News on central bankers also will be closely watched. Federal Reserve Bank of New York President William Dudley is close to announcing his retirement, according to CNBC. His early departure would mean the top three positions at the Fed changing over within a relatively short period. Trump announced last week that Fed Governor Jerome Powell will be nominated to replace Janet Yellen when her term expires in February. Vice Chairman Stanley Fischer retired in mid-October.

Terminal users can read more in our Markets Live blog.

Here are key events to watch out for this week:

The European Commission’s chief Brexit negotiator Michel Barnier and U.K. Brexit Secretary David Davis resume talks on the terms of Britain’s exit from the European Union.

Earnings season continues with announcements from Toyota Motor Corp., BMW AG, Walt Disney Co., Adidas AG, and Siemens AG. European financial companies set to report include Intesa Sanpaolo SpA, Banca Monte dei Paschi di Siena SpA,Credit Agricole SA, Allianz SE and Zurich Insurance Group AG.

Donald Trump continues on his first official trip to Asia as president, accompanied by Secretary of State Rex Tillerson and a group of U.S. business leaders.

New Jersey and Virginia will choose new governors in this off-year election

U.S. consumer sentiment probably cooled in early November from a more than 13-year high; the University of Michigan’s report is out on Friday.

OPEC releases its World Oil Outlook, presented by Secretary-General Mohammad Barkindo.

Argentina, Australia, Mexico, New Zealand, Peru, Malaysia, Poland, Serbia and Thailand set monetary policy.

And these are the main moves in markets:

Stocks

The Stoxx Europe 600 Index dipped less than 0.05 percent as of 11:27 a.m. London time.

The U.K.’s FTSE 100 Index sank 0.1 percent.

Germany’s DAX Index fell 0.2 percent.

Japan’s Nikkei 225 Stock Average gained less than 0.05 percent to the highest in more than 21 years.

The MSCI Asia Pacific Index rose less than 0.05 percent.

The MSCI Emerging Market Index increased 0.2 percent.

Futures on the S&P 500 Index decreased 0.1 percent to 2,580.75.

Currencies

The Bloomberg Dollar Spot Index declined 0.1 percent.

The euro fell 0.1 percent to $1.1596, the weakest in almost 16 weeks.

The British pound climbed 0.3 percent to $1.311.

The Japanese yen was unchanged at 114.07 per dollar.

Bonds

The yield on 10-year Treasuries declined one basis point to 2.32 percent, the lowest in more than two weeks.

Germany’s 10-year yield fell three basis points to 0.33 percent, the lowest in almost two months.

Britain’s 10-year yield declined one basis point to 1.253 percent, the lowest in more than seven weeks.

Japan’s 10-year yield decreased three basis points to 0.024 percent, the lowest in almost eight weeks.

Commodities

West Texas Intermediate crude gained 0.5 percent to $55.91 a barrel, the highest in about nine months.

Gold increased 0.1 percent to $1,271.73 an ounce.

Copper rose 1.1 percent to $3.15 a pound, the highest in more than a week.