Stocks Fluctuate Before Fed Speakers; Euro Falls: Markets Wrap

(Bloomberg) — Traders were on edge as they awaited speeches from Federal Reserve officials to gain insight into the direction of monetary policy.

Europe’s Stoxx 600 benchmark and US stock futures showed minimal movement. The euro weakened and German bond yields dropped following disappointing French services PMI data. In Asia, stock markets rose after China’s announcement of an economic briefing and a reduction in a short-term policy rate.

Investors are keenly watching for comments from Fed speakers Raphael Bostic and Austan Goolsbee following the recent rate cut in the US. In China, the possibility of stimulus measures is seen as crucial to support markets amid concerns over the country’s growth prospects.

Mohit Kumar, chief strategist and economist at Jefferies International Ltd., noted, “The start of the Fed easing cycle should lead to more stimulus from China, particularly as the 5% growth target seems difficult to achieve. The stimulus measures should also benefit Europe.”

In France, economic activity slowed significantly in September, with the Composite PMI declining to 47.4 from the previous month. Political uncertainty stemming from President Emmanuel Macron’s government reshuffle has dampened investor confidence. Prime Minister Michel Barnier hinted at potential tax increases for large corporations and the wealthy to address budget deficits.

In Germany, the Social Democrats managed to retain power in the state of Brandenburg, fending off the far-right Alternative for Germany.

UK Chancellor of the Exchequer Rachel Reeves is anticipated to deliver a more upbeat message regarding the economy at the Labour Party’s conference, aiming to counter the negative sentiment caused by the government’s gloomy budget forecasts.

Upcoming events include monetary policy decisions from the central banks of Sweden and Switzerland. Traders are also keeping an eye on key economic indicators such as the Fed’s preferred price metric and US personal spending and income data for further insights into the state of the economy following the recent rate cut.

Gold prices reached a record high amidst escalating tensions in the Middle East, driving demand for the safe-haven asset.

Key events this week:

• Eurozone HCOB Manufacturing PMI, HCOB Services PMI, Monday

• UK S&P Global Manufacturing PMI, S&P Global Services PMI, Monday

• Australia rate decision, Tuesday

• Japan Jibun Bank Manufacturing PMI, Services PMI, Tuesday

• Mexico CPI, Tuesday

• Bank of Canada Governor Tiff Macklem speaks, Tuesday

• Australia CPI, Wednesday

• China medium-term lending facility rate, Wednesday

• Sweden rate decision, Wednesday

• Switzerland rate decision, Thursday

• ECB President Christine Lagarde speaks, Thursday

• US jobless claims, durable goods, revised GDP, Thursday

• Fed Chair Jerome Powell gives pre-recorded remarks to the 10th annual US Treasury Market Conference, Thursday

• Mexico rate decision, Thursday

• Japan Tokyo CPI, Friday

• China industrial profits, Friday

• Eurozone consumer confidence, Friday

• US PCE, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.1% as of 8:42 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures were little changed

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index rose 0.2%

• The MSCI Emerging Markets Index rose 0.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.5% to $1.1110

• The Japanese yen rose 0.2% to 143.60 per dollar

• The offshore yuan fell 0.3% to 7.0610 per dollar

• The British pound fell 0.4% to $1.3270

Cryptocurrencies

• Bitcoin rose 0.5% to $63,515.51

• Ether rose 2.6% to $2,641.58

Bonds

• The yield on 10-year Treasuries was little changed at 3.74%

• Germany’s 10-year yield declined four basis points to 2.16%

• Britain’s 10-year yield declined two basis points to 3.88%

Commodities

• Brent crude rose 0.1% to $74.59 a barrel

• Spot gold fell 0.2% to $2,615.41 an ounce

This content was created with the assistance of Bloomberg Automation.

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