-
Italian bond yields drop again, but pace slows; oil slips
-
Asia shares gain on China data; emerging-market equities climb
European stocks drifted following an Asian equity bounce as investors struggled to rebuild their confidence amid a muddled Italian political outlook and an uncertain trade picture. The dollar edged lower while the euro climbed as Italian bond yields declined.
The Stoxx Europe 600 Index pared an early gain despite a more upbeat mood in Asia. The MSCI Asia Pacific Index bounced after touching its lowest level since February Wednesday. Hong Kong and Chinese stocks outperformed as China’s official factory gauge underscored robust growth despite debt curbs and trade tensions. U.S. 10-year yields hovered above 2.85 percent.
Amid political and trade turbulence, the next focus for traders may well be the U.S. jobs report on Friday, the last one before the Federal Reserve meets next month, when it’s expected to lift interest rates for the seventh time since the end of 2015. Morgan Stanley Chief Executive Officer James Gorman said the Fed is unlikely to be dissuaded from pursuing its path of monetary tightening as a result of recent volatility in financial markets.
“We are going to be filled with tremendous uncertainty over the course of the summer,” David Ader, chief macro strategist at Informa Financial Intelligence, told Bloomberg Television. “I don’t see that at this point in time we have a big directional play. I see a lot of uncertainty, which results in a lot of volatility.”
Elsewhere, the Indonesian rupiah led a broader emerging-market currency rally after Bank Indonesia raised the benchmark interest rate for a second time in less than two weeks on Wednesday and flagged more increases to counter a selloff in nation’s currency and bonds.
Terminal users can read more in Bloomberg’s Markets Live blog.
These are some key events to watch this week:
- The U.S. employment report for May is due Friday. It’s the last before the June Fed meeting.
- Automakers report May U.S. sales the same day.
- Also Friday: some onshore Chinese stocks join MSCI Inc.’s global indexes.
- On Saturday U.S. Secretary of Commerce Wilbur Ross will travel to Beijing for more talks with Vice Premier Liu He on topics including ZTE Corp. and trade.
These are the main moves in markets:
Stocks
- The Stoxx Europe 600 Index rose 0.1 percent as of 8:18 a.m. London time.
- The MSCI World Index of developed countries increased 0.3 percent.
- The MSCI Asia Pacific Index gained 0.8 percent, the largest rise in almost three weeks.
- Japan’s Nikkei 225 Stock Average gained 0.8 percent, the biggest rise in almost three weeks.
- The MSCI Emerging Market Index climbed 0.8 percent, the largest increase in three weeks.
- The U.K.’s FTSE 100 Index gained 0.3 percent.
- Futures on the S&P 500 Index decreased 0.1 percent.
Currencies
- The Bloomberg Dollar Spot Index fell 0.2 percent to the lowest in a week.
- The euro climbed 0.2 percent to $1.1688, the strongest in a week.
- The British pound increased 0.2 percent to $1.3314, the strongest in a week.
- The Japanese yen gained 0.3 percent to 108.63 per dollar, the strongest in almost six weeks.
Bonds
- The yield on 10-year Treasuries increased one basis point to 2.86 percent.
- Germany’s 10-year yield fell less than one basis point to 0.37 percent.
- Britain’s 10-year yield climbed one basis point to 1.257 percent.
Commodities
- West Texas Intermediate crude dipped 0.3 percent to $67.98 a barrel.
- Gold rose 0.3 percent to $1,305.14 an ounce, the highest in more than two weeks on the biggest advance in a week.
By Andreea Papuc and Samuel Potter – May 31, 2018, 5:23 PM GMT+10
— With assistance by Samuel Potter, and Randall Jensen
Source: Bloomberg