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European stocks and U.S. equity futures edged higher Monday following a mixed session in Asia as a big week for central-bank policy gets underway. Treasuries fell and the dollar was steady.
The Stoxx Europe 600 Index rose, with Deutsche Bank boosting lenders on reports that it’s considering creating a “bad bank” to wind down legacy assets as part of a broader overhaul. Contracts on the S&P 500, Dow Jones Industrial Average and Nasdaq 100 gauges ticked higher. Japanese and Australian shares slipped, while equities in Hong Kong rose after the government suspended a controversial extradition bill. Treasury yields climbed while European bonds were mixed as investors looked ahead to a week in which the Federal Reserve, the Bank of Japan and the Bank of England all set monetary policy.
Investors will be scrutinizing the Fed’s decision and messaging on Wednesday for signals on the chances of rates cuts ahead. Meanwhile, U.S. Commerce Secretary Wilbur Ross reiterated that the prospect of a major trade deal is unlikely to emerge from a possible meeting between President Donald Trump and Chinese President Xi Jinping at the Group of 20 summit in Osaka this month.
The Fed’s “overall tone will be dovish but there’s a fair bit priced into the market already,” Sally Auld, senior interest-rate strategist at JPMorgan Chase & Co., told Bloomberg TV in Sydney. “It’s probably going to be hard for the Fed to exceed what is already priced in.”
Elsewhere, oil futures dipped as Saudi Arabia expressed hope that OPEC and its allies will agree to extend production cuts into the second half. Bitcoin jumped, heading toward its highest close in more than a year.
Here are some key events coming up:
Federal Reserve, the Bank of Japan and the Bank of England all set monetary policy, along with central banks in Norway, Brazil, Taiwan and Indonesia.Fed meeting begins Tuesday with a decision and press conference the next day. Officials are expected to debate a rate cut to shelter the U.S. economy, in part, from the fallout caused by escalating trade disputes.In the U.K. Tuesday there will be a second ballot on the leadership contest to choose Theresa May’s successor as leader of the country’s ruling party.Final May CPI data for the euro zone are due Tuesday.Thursday brings the BOJ policy decision.
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index increased 0.2% as of 10:31 a.m. London time.The Stoxx Europe 600 Index climbed 0.1%.The Shanghai Composite Index gained 0.2%.The MSCI Emerging Market Index fell 0.3%, the lowest in more than a week.
Currencies
The Bloomberg Dollar Spot Index was unchanged at the highest in more than two weeks.The euro jumped 0.1% to $1.1214.The British pound fell less than 0.05% to $1.2583, the weakest in about six months.The Japanese yen declined less than 0.05% to 108.61 per dollar, the weakest in more than two weeks.The onshore yuan dipped less than 0.05% to 6.927 per dollar, the weakest in a week.
Bonds
The yield on 10-year Treasuries gained three basis points to 2.11%, the first advance in a week.The yield on two-year Treasuries gained three basis points to 1.87%, the largest advance in a week.Germany’s 10-year yield climbed one basis point to -0.25%, the first advance in a week.Japan’s 10-year yield increased one basis point to -0.123%.
Commodities
West Texas Intermediate crude dipped 0.4% to $52.28 a barrel.Iron ore sank 2.1% to $102.88 per metric ton, the largest tumble in two months.Gold fell 0.6% to $1,333.46 an ounce, the biggest fall in a week.Soybeans gained 1.8% to $9.40 a bushel, hitting the highest in more than 12 weeks with its sixth straight advance.
