Stocks Drift at Record Highs; Dollar Rally Pauses

• Stocks Drift at Record Highs; Dollar Rally Pauses

Stocks drifted with investors assessing the magnitude of recent gains in global equities as a deadline on Catalonia’s independence claim from Spain loomed and China kicked off its twice-in-a-decade Communist Party Congress.

Equities in Asia were mixed with volumes subdued, despite fresh records for U.S. stocks, as investors parsed Chinese President Xi Jinping’s 3 1/2-hour long speech that started the week-long event. European stock-index futures indicated a muted start to trading. The dollar’s rally from the start of the week petered out as traders tracked Nafta developments. Xi said China was pushing through reforms in a systematic way as he warned of “severe” challenges and laid out a road map to turn the nation into a leading global power by 2050.

The Bloomberg dollar index fluctuated in a narrow range. Negotiations over the future of the North American Free Trade Agreement were extended into the first quarter of 2018 in a bid to resolve differences with Canada and Mexico. That sent the Mexican peso more than 1 percent higher on Tuesday and it was holding those gains.

The euro was steady after recovering from a slide when Spain cut its growth forecast for 2018, acknowledging the impact of an escalating political crisis in Catalonia, a region that accounts for a fifth of the country’s output. Catalonia has until Thursday to back down from a challenge to secede.

Markets have been stable with a lack of volatility going into the start of China’s Communist Party Congress. However, in the past the meetings coincided with an average 3.3 percent drop on the benchmark Shanghai Composite Index and a further 3.3 percent in the following five trading days. The reaction on Wednesday was muted: the yuan barely inched higher as did the Shanghai Composite Index.

U.S. President Donald Trump’s choice for the next chair of the Federal Reserve, which has been a focus for markets in recent weeks, will be unveiled before he leaves Nov. 3 for an 11-day trip to Asia and Hawaii, a person familiar with the process said Tuesday. John Taylor was said to have impressed Trump in an interview, buoying gains in the greenback earlier this week given the assumption by many that he would favor tighter policy. Trump also tried to rally support for his tax plan in a speech on Tuesday.

Here are the main moves in markets:

Stocks

• Japan’s Topix index closed less than 0.1 percent higher in Tokyo. Australia’s S&P/ASX 500 Index ended flat, while South Korea’s Kospi index was also little changed.
• Hong Kong’s Hang Seng Index inched lower, while the Shanghai Composite Index was up 0.1 percent.
• Euro Stoxx 50 futures were steady.
• Futures on the S&P 500 Index were little changed. The underlying gauge rose 0.1 percent to close at a fresh all-time high in New York.
• The MSCI Asia Pacific Index was little changed as was the MSCI Emerging Market Index after dropping 0.5 percent in the previous session.

Currencies

• The Bloomberg Dollar Spot Index was steady.
• The euro was at $1.1769 after falling 0.3 percent on Tuesday.
• The pound was at $1.3179. It slipped 0.5 percent on Tuesday after Governor Mark Carney said the Bank of England is making contingency plans for a “hard” exit from the European Union.
• The yen fell 0.1 percent to 112.33 per dollar.
• The New Zealand dollar fell 0.3 percent to 71.52 U.S. cents. New Zealand First will be in a position on Thursday afternoon to make an announcement on a government.

Bonds

• The yield on 10-year Treasuries was little changed at 2.3 percent.
• Australia’s 10-year yield fell four basis points to 2.72 percent.
• German 10-year bund yields were steady at 0.36 percent.

Commodities

• West Texas Intermediate climbed 0.3 percent to $52.03 a barrel.
• Gold was little changed at $1,283.97 an ounce.