- Dollar Declines as Stocks Drop; Treasuries Steady
The dollar declined and Treasury yields fluctuated as President Donald Trump challenged China over what he called unfair trade practices. European stocks fell after a volatile session in Asian markets, while the euro and bund yields rose after the European Commission lifted its growth forecasts.
Basic-resources shares weighed on the Stoxx Europe 600 index following a decline in industrial-metals prices. The EC’s bullish outlook for the region’s economy failed to lift stocks as disappointing results from companies including Siemens AG and Vestas Wind Systems A/S added to the malaise. U.S. stock-index futures signaled a lower open. Equities in Asia earlier rose above their 2007 peak before an intraday reversal in Japanese shares on technically-driven trading pared gains in the region. Sterling fluctuated as Brexit talks resumed, while oil halted a two-day drop.
Investor attention has focused on Asia this week, where Trump has embarked on an 11-day tour. In Beijing Thursday, he said China is taking advantage of American workers and companies with unfair trade practices, but he blamed his predecessors in the White House rather than China for allowing the massive U.S. trade deficit to grow. A year after Trump was elected to president, investors are also reflecting on how financial markets have fared in the interim.
Meanwhile, Brexit talks resume Thursday in Brussels with no indication that a breakthrough is in reach. The EC said economic growth in the U.K. is headed for a prolonged slowdown even as the euro-area economy is forecast to expand at the fastest pace in a decade this year. And in the U.S., tax reform discussions continue. The Senate is due to release a “conceptual mark” of a proposal Thursday, according to a spokeswoman.
Elsewhere, the New Zealand dollar held onto Wednesday’s gains after the central bank flagged it may raise interest rates earlier than expected. Bitcoin soared to another record after a technology upgrade that was threatening to disrupt the biggest cryptocurrency was called off. Nickel led the slump in industrial metals.
Stocks
- The Stoxx Europe 600 Index sank 0.7 percent as of 12:41 p.m. London time, the lowest in two weeks.
- The U.K.’s FTSE 100 Index sank 0.6 percent to the lowest in two weeks.
- Germany’s DAX Index fell 0.9 percent to the lowest in more than a week.
- Japan’s Nikkei 225 Stock Average fell 0.2 percent.
- The MSCI Asia Pacific Index gained 0.2 percent to the highest in about 10 years.
- The MSCI Emerging Market Index increased 0.1 percent to the highest in more than six years.
- Futures on the S&P 500 Index decreased 0.4 percent to 2,581.50, the lowest in a week.
Currencies
- The Bloomberg Dollar Spot Index declined 0.2 percent to the lowest in more than two weeks.
- The euro advanced 0.3 percent to $1.1631, the strongest in a week.
- The British pound increased 0.1 percent to $1.3129.
- The Japanese yen climbed 0.4 percent to 113.40 per dollar, the strongest in more than a week.
Bonds
- The yield on 10-year Treasuries increased less than one basis point to 2.33 percent, the highest in a week.
- Germany’s 10-year yield climbed five basis points to 0.37 percent, the highest in a week.
- Britain’s 10-year yield advanced four basis points to 1.263 percent, the highest in more than a week.
- Japan’s 10-year yield gained less than one basis point to 0.03 percent.
Commodities
- West Texas Intermediate crude increased 0.1 percent to $56.86 a barrel.
- Gold gained 0.4 percent to $1,285.90 an ounce, the highest in three weeks.
- Copper fell 0.8 percent to $3.08 a pound, the lowest in a month.
