European Stock Bounce Fades, Dollar Rally Pauses: Markets Wrap

European stocks ceded earlier gains and headed for an eighth straight day of losses, while the dollar slipped following dovish comments from Federal Reserve officials

(Bloomberg) — European stocks ceded earlier gains and headed for an eighth straight day of losses, while the dollar slipped following dovish comments from Federal Reserve officials 

The Stoxx 600 Index is now headed for its longest run of daily losses since 2016, declining 0.4% after an initial firmer open. US equity futures also turned negative, with the S&P 500 index contracts down 0.1%.

Still, the biggest narrative of the week remains the dramatic moves in currencies and the widening gulf in economic growth prospects between the US and the rest of the world. The Bloomberg Dollar Spot Index is still on track for an eighth consecutive week of gains, which would be the longest ever run of increases in data going back to 2005. 

However the greenback paused for breath on Friday, as traders pared back expectations on US interest rates, following comments by Fed officials, in particular from Bank of New York President John Williams who said US monetary policy is “in a good place.” 

Energy markets also took center stage as workers at key Chevron Corp. sites in Australia started long-awaited strikes. European benchmark gas prices jumped as much as 11% on concern the work stoppages will disrupt supply. 

 

In China, the offshore-traded yuan approached the lowest level on record and a cut to the daily reference rate stoked bets that officials are comfortable with a gradual depreciation. Equities in the region fell, with the MSCI Asia Pacific Index losing 0.5% on the day. 

Key events this week:

  • US wholesale inventories, consumer credit, Friday

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 fell 0.3% as of 9:29 a.m. London time
  • S&P 500 futures fell 0.1%
  • Nasdaq 100 futures were little changed
  • Futures on the Dow Jones Industrial Average were little changed
  • The MSCI Asia Pacific Index fell 0.4%
  • The MSCI Emerging Markets Index was little changed

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro rose 0.2% to $1.0716
  • The Japanese yen was little changed at 147.39 per dollar
  • The offshore yuan fell 0.2% to 7.3541 per dollar
  • The British pound rose 0.2% to $1.2496

Cryptocurrencies

  • Bitcoin rose 0.8% to $26,210.82
  • Ether rose 0.4% to $1,644.78

Bonds

  • The yield on 10-year Treasuries was little changed at 4.24%
  • Germany’s 10-year yield was little changed at 2.61%
  • Britain’s 10-year yield declined one basis point to 4.44%

Commodities

  • Brent crude was little changed
  • Spot gold rose 0.2% to $1,924.22 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson.

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