U.S. Futures Fluctuate Before Fed; Bonds Advance: Markets Wrap

 

 

Here are some key events to watch this week:

• The Federal Reserve decides on interest rates on Wednesday, followed by a press briefing from Chairman Jerome Powell. Brazil’s central bank also has a rate decision.
• The next European Central Bank policy meeting is on Thursday.
• The U.K. holds a general election Thursday.

Stocks

• Futures on the S&P 500 Index increased 0.1% as of 8:31 a.m. New York time.
• The Stoxx Europe 600 Index was little changed.
• The MSCI Asia Pacific Index gained 0.3%.
• The MSCI Emerging Market Index advanced 0.6%.

Currencies

• The Bloomberg Dollar Spot Index was little changed.
• The euro sank 0.1% to $1.1082.
• The British pound was little changed at $1.3154.
• The onshore yuan declined 0.1% to 7.039 per dollar.
• The Japanese yen was little changed at 108.71 per dollar.

Bonds

• The yield on 10-year Treasuries declined one basis point to 1.83%.
• The yield on two-year Treasuries fell less than one basis point to 1.65%.
• Germany’s 10-year yield sank two basis points to -0.31%.
• Britain’s 10-year yield fell one basis point to 0.79%.
• Japan’s 10-year yield advanced two basis points to 0.003%.

Commodities

• West Texas Intermediate crude decreased 0.4% to $58.98 a barrel.
• Iron ore dipped 0.1% to $92.67 per metric ton.
• Gold climbed 0.1% to $1,466.29 an ounce.

U.S. equity futures fluctuated with European stocks before the Federal Reserve’s final policy decision of the year and amid lingering uncertainty over the progress of trade negotiations between America and China. Treasuries edged higher and the dollar was steady after a key measure of U.S. consumer prices remained subdued in November.

Contracts on the three main U.S. equity gauges drifted as traders awaited the Fed meeting, where policy makers are widely expected to keep rates unchanged. Home Depot Inc. dropped in pre-market trading after reducing its sales forecast for next year, amid a softening housing market. The Stoxx Europe 600 Index swung between gains and losses, while Asia stocks were mostly higher after White House adviser Peter Navarro said he had no indication that President Donald Trump will do “anything other than have a great deal or put the tariffs on” from Dec. 15.

 

The pound fluctuated after a closely watched opinion poll showed Prime Minister Boris Johnson’s lead in Britain’s general election slashed by more than half.

With the world’s top two economies still wrangling over an interim deal, Thursday may bring news as Trump is expected to meet with his trade team, according to people familiar with the talks. As for interest rates, the Fed’s Open Market Committee is expected to avoid signaling a further reduction is on the immediate horizon when it delivers a verdict later Wednesday.

“The markets have become numb to the noise” on trade, Burns McKinney, Allianz Global portfolio manager, said on Bloomberg TV. “The FOMC meeting, the election in the U.K. and then later this week the December 15 deadline are all factors that I think the markets have generally not priced in any bad news.”

Elsewhere, Indian bonds declined as S&P Global Ratings warned it may lower the nation’s sovereign ratings if economic growth doesn’t recover. Oil-producing giant Saudi Aramco jumped the daily limit of 10% in its trading debut in Riyadh. West Texas Intermediate crude futures slipped.