Stocks Fluctuate Before Fed Speakers; Euro Falls: Markets Wrap

(Bloomberg) — Stocks fluctuated as traders looked forward to speeches from Federal Reserve officials for fresh insight on the pace and scope of easing.

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Europe’s Stoxx 600 benchmark and US stock futures traded little changed. The euro retreated and German bond yields fell after a lower-than-expected French services PMI reading. In Asia, stock benchmarks climbed after China announced plans for a rare economic briefing Tuesday and cut a short-term policy rate.

After last week’s jumbo rate cut in the US, investors are awaiting comments from Fed speakers including regional presidents Raphael Bostic and Austan Goolsbee on Monday. In China, any signs that stimulus is on the way could bolster markets more broadly after disappointing data raised concern the country will miss its annual expansion target.

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

The French economy experienced a sharp post-Olympics slowdown in September, with the Composite PMI dropping to 47.4 from August’s 53.1, data on Monday showed. Political turmoil, triggered by President Emmanuel Macron’s reshuffled government, has undermined investor confidence. Prime Minister Michel Barnier said his new government could increase taxes for big business and the wealthiest as it seeks to repair runaway budget deficits.

In Germany, Olaf Scholz’s Social Democrats held off the far-right Alternative for Germany and looked set to cling on to power in the eastern state of Brandenburg.

UK Chancellor of the Exchequer Rachel Reeves, meanwhile, is expected to give a more “positive, optimistic message” about the future of the economy at the Labour Party’s annual conference, Environment Secretary Steve Reed told Bloomberg Radio. This comes after the government was criticized for dragging down confidence with gloomy warnings about the October budget.

Elsewhere this week, the central banks of Sweden and Switzerland are scheduled to hold monetary policy decisions. On Friday, traders will be watching for the Fed’s preferred price metric and data on US personal spending and income for further clues on the strength of the economy after last week’s 50 basis-point rate cut.

Story continues

Gold touched a record high as the worsening strife in the Middle East fueled wagers on further price gains in the metal due to its haven status.

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 story was produced with the assistance of Bloomberg Automation.

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