U.S. Futures Drop With Dollar; Treasuries Climb: Markets Wrap

These are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index rose 1% as of 7:17 a.m. New York time.
• Futures on the S&P 500 Index decreased 2.1%.
• The MSCI All-Country World Index dipped 0.2%.
• The U.K.‘s FTSE 100 Index gained 0.7%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%.
• The euro rose 0.4% to $1.133.
• The British pound increased 0.1% to $1.2925.
• The Japanese yen strengthened 0.6% to 104.97 per dollar.

Bonds

• The yield on 10-year Treasuries sank 11 basis points to 0.70%.
• The yield on two-year Treasuries fell 10 basis points to 0.43%.
• Germany’s 10-year yield increased two basis points to -0.77%.
• Britain’s 10-year yield gained four basis points to 0.283%.

Commodities

• West Texas Intermediate crude fell 2.9% to $33.37 a barrel.
• Gold strengthened 1.1% to $1,667.45 an ounce.

Here are some key events coming up:

• The European Central Bank’s policy decision comes Thursday amid expectations it may ease policy.
• The U.K. Chancellor of the Exchequer unveils the government’s 2020 budget on Wednesday.
• The U.S. core consumer price index, due Wednesday, is expected to remain subdued in February.

Wednesday brought another day of reversals in many major markets, with U.S. stock futures dropping, the dollar weakening and Treasury yields falling after surging a day earlier.

Contracts on the S&P 500 Index declined more than 2% after the U.S. administration failed to offer details on what President Donald Trump said would be “major” measures to combat the economic impact of the coronavirus. The Stoxx Europe 600 gained as the European Central Bank indicated it may act as soon as this week and the Bank of England cut rates. But the benchmark trimmed the advance as travel and leisure shares dropped and Adidas SA slumped after warning the coronavirus would cut profit.

Most Asian benchmarks fell, while the yen rallied. Crude oil’s rebound from its biggest crash in a generation faltered after Saudi Arabia said it would boost production. The pound fluctuated and gilts declined after the BOE reduced its main interest rate by 50 basis points.

The BOE’s emergency move came a week after the Federal Reserve slashed its main rate, and as ECB President Christine Lagarde warned of an economic shock similar to the financial crisis unless leaders act urgently — comments which suggest the bank may join the wave of crisis easing when it sets policy on Thursday. The U.K. is expected to unveil an expansionary budget later Wednesday, and Germany and Italy have also announced fiscal support.

“Despite the hopes for fiscal stimulus everywhere, we see significant downside risks,” said Guillaume Tresca, a strategist at Credit Agricole SA in Paris. “As long as uncertainties remain on the number of cases, and central banks’ actions and fiscal stimulus plans are not lifted, we see few reasons for a protracted and long-term rebound.”

Meanwhile, Joe Biden cemented his position as front-runner for the U.S. Democratic presidential nomination with primary victories Tuesday, further easing concerns among those opposing Bernie Sanders’s progressive platform.

— With assistance by Adam Haigh, and Winnie Zhu