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Ten-year Treasury yield steady at 2.94%; dollar advances
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HSBC earnings trails estimates, hold European banks down
European shares edged lower and U.S. equity futures struggled for direction following a mixed session in Asia as China signaled it won’t flinch in a trade war. The dollar climbed and Treasuries held steady.
Banks were among the biggest losers in the Stoxx Europe 600 Index afterHSBC’s earnings disappointed. Contracts on the S&P, Dow and Nasdaq pointed to an uninspiring open after the Shanghai Composite Index extended losses. Oil edged higher and metals were mixed. The yield on 10-year Treasuries steadied at 2.94 percent.
The Bloomberg Dollar Spot Index climbed for the fourth day in five sessions, and the yuan pared some of its gains following a rally triggered as the Chinese central bank on Friday made it more costly to short the currency. The euro was flat after German manufacturers took a hit in June, and the pound fell for a third day following the prediction by a key U.K. minister that the nation may face a messy split from Europe.
Rhetoric in the trade war was ramped up again this weekend, with U.S. President Donald Trump saying he has the upper hand, and Beijing responding through state media that it is ready to endure the economic fallout. The Asian country on Friday stepped in to try to cushion the yuan after a record string of weekly losses saw the currency closing in on the milestone of 7 per dollar.
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Here are some key events coming up this week:
- Earnings season includes results from: Japan Post Bank, Disney, 21st Century Fox, Deutsche Telekom, China Mobile, Glencore and Adidas.
- Tuesday brings the latest Reserve Bank of Australia meeting that is forecast to produce no change in either the record-low cash rate or the long-term guidance.
- The Bank of Japan releases a summary of opinions Wednesday from its July 30-31 meeting, at which it tweaked elements of its stimulus policy to make it more sustainable.
- Samsung Electronics unveils its next Galaxy Note smartphone.
- U.S. consumer prices probably rose in July, consistent with a pickup in inflation that’s projected to keep the Federal Reserve on a path of gradual interest-rate increases, economists forecast before Friday’s release.
These are the main moves in markets:
Stocks
- The Stoxx Europe 600 Index decreased less than 0.05 percent as of 8:49 a.m. London time.
- Futures on the S&P 500 Index fell less than 0.05 percent.
- The MSCI All-Country World Index dipped 0.1 percent.
- The MSCI Emerging Market Index gained less than 0.05 percent.
Currencies
- The Bloomberg Dollar Spot Index climbed 0.1 percent.
- The euro fell 0.1 percent to $1.1562, reaching the weakest in almost six weeks on its fifth straight decline.
- The British pound dipped 0.2 percent to $1.2977, the weakest in 11 months.
- The Japanese yen declined less than 0.05 percent to 111.28 per dollar.
Bonds
- The yield on 10-year Treasuries advanced less than one basis point to 2.95 percent.
- Germany’s 10-year yield advanced less than one basis point to 0.41 percent.
- Britain’s 10-year yield climbed one basis point to 1.329 percent.
Commodities
- The Bloomberg Commodity Index declined 0.2 percent.
- West Texas Intermediate crude climbed 0.6 percent to $68.87 a barrel.
- LME copper dipped 1.4 percent to $6,119.00 per metric ton, the lowest in more than two weeks.
- Gold fell 0.2 percent to $1,211.96 an ounce.
By Eddie van der Walt and Adam Haigh
— With assistance by Andreea Papuc
August 6, 2018, 6:03 PM GMT+10
Source: Bloomberg