The dollar slipped and Treasuries rose as traders shifted focus from North Korea to a week packed with central-bank decisions, Federal Reserve speakers and economic data that will help illuminate the path of the global economy.
The S&P 500 fell after a six-day rally as US markets reopened following the Labor Day holiday. The Stoxx Europe 600 Index traded little changed, paring an earlier gain as the euro clawed back a drop against the dollar. The yen extended gains and Treasuries climbed amid lingering unease over North Korean plans for a ballistic missile launch, but gold declined as the risk-off trade softened. West Texas crude rose a third day and copper extended its rally to a three-year high.
The greenback extended declines amid dovish comments from Fed Governor Lael Brainard on Tuesday. Mario Draghi may give more clarity on paring back the European Central Bank’s bond-buying program when he speaks after a rates decision on Thursday. US durable-goods figures, the trade balance, unemployment claims, and the release of
the Fed’s Beige Book will add to the global data mix after a purchasing managers’ index on Tuesday indicated the euro area is poised for the fastest economic
expansion in a decade.
Meanwhile, US President Donald Trump agreed to support billions of dollars in new weapons sales to South Korea after North Korea’s largest nuclear test, while his ambassador to the United
Nations said America would seek the strongest possible sanctions against Kim Jong Un’s regime. Tensions escalated after Asia Business Daily reported North Korea was preparing to fire an ICBM.
Among other economic numbers out of China, trade figures are anticipated to show another month of solid export growth, while FX reserves probably continued to rise on stricter capital controls, robust growth and a stronger yuan, according to Bloomberg Intelligence. Other Fed speakers this week include New York Fed President Bill Dudley and Dallas Fed President Robert Kaplan. The European Central Bank meets on Thursday. President Mario Draghi will express concern over the euro’s strength, but won’t say much about his asset-purchase program’s future, according to a survey. The S&P 500 Index sank 0.2 percent as of 9:34 a.m. in New York. The Stoxx Europe 600 Index gained 0.2 percent. The UK’s FTSE 100 Index declined 0.1 percent. Germany’s DAX Index climbed 0.6 percent to the highest in more than a week.
The Bloomberg Dollar Spot Index declined 0.2 percent to 1,148.97 the biggest drop in more than a week. The euro dipped
less than 0.05 percent to $1.1895. The British pound gained 0.4 percent to $1.2984, the strongest in more than three weeks. The Japanese yen climbed 0.5 percent to 109.17 per dollar, the strongest in almost two weeks.
The yield on 10-year Treasuries fell six basis points to 2.11 percent, a 10-month low. Germany’s 10-year yield declined one basis point to 0.35 percent. Britain’s 10-year yield declined 2 basis points to 1.038 percent.
Gold dipped 0.1 percent to $1,332.25 an ounce, the biggest decrease in more than a week. West Texas Intermediate crude rose 2.9 percent to $48.64 a barrel, the highest in almost two weeks. Copper increased 1.2 percent to $3.16 a pound, the highest in about three years on the biggest climb in more than a week.
Japan’s Topix index fell 0.8 percent at the close, while South Korea’s Kospi index lost 0.1 percent. Australia’s S&P/ASX 200 Index rose 0.1 percent.