Monday , December 9 2019

US stock futures drift as Treasuries hold steady

Bloomberg

US equity futures drifted while European shares fell and Asian stocks were mixed as investors marked time before key central bank meetings in the coming days. The dollar strengthened.
Contracts on the three main US indexes signalled they’ll open with modest declines. The Stoxx Europe 600 Index dropped a second day, led by financial services and health-care shares. The pound fluctuated as embattled British Prime Minister Boris Johnson insisted he won’t ask for another Brexit delay, while UK wage and unemployment data beat estimates. Most euro-zone sovereign bonds nudged lower as European Central Bank officials prepare to meet. Treasuries held steady.
The recent pullback in the bond rally “is a correction to an outsized move in yields during August, not a turn in the trend,” Kit Juckes, chief global FX strategist at Societe Generale SA, wrote in his daily note. “Last Friday’s US labour market data show, clearly enough for me, that the US economy is slowing slowly but steadily as the global trade slowdown infects it.”
Investors are awaiting the ECB’s policy decisions on Thursday and those next week by the Federal Reserve and Bank of England as they assess how much monetary easing may be looming. On the foreign-trade front, Treasury Secretary Steven Mnuchin said that US and China have “made a lot of progress” on talks. Separately, China removed one more hurdle for foreign investment into its capital markets on Tuesday.
Elsewhere, oil extended gains to the highest level in almost six weeks as Saudi Arabia’s new energy minister signalled his commitment to production cuts ahead of an OPEC+ meeting. Gold headed for its fourth day of declines, sinking to around $1,495 an ounce. Sweden’s krona tumbled after the country’s inflation unexpectedly slowed.
The ECB policy meeting on Thursday is widely expected to see a cut to interest rates and a review of all options, including QE. Policy makers will also publish forecasts for growth and inflation. ECB President Mario Draghi will hold a press conference. US data for August is due on producer prices on Wednesday, and CPI on Thursday.
Futures on the S&P 500 Index fell 0.1 percent in New York. The Stoxx Europe 600 Index dipped 0.3 percent. Italy’s FTSE MIB Index dropped 0.4 percent. The MSCI Emerging Market Index fell 0.1 percent.
The Bloomberg Dollar Spot Index climbed 0.1 percent. The euro sank 0.1 percent to $1.1038. The British pound was little changed at $1.2347. Sweden’s krona weakened 0.7 percent to 10.742 per euro.
The yield on 10-year Treasuries declined one basis point to 1.64 percent. Germany’s 10-year yield climbed one basis point to -0.57 percent. Britain’s 10-year yield advanced one basis point to 0.598 percent. Japan’s 10-year yield climbed three basis points to -0.221 percent.
Gold declined 0.4 percent to $1,493.55 an ounce.

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