US equities opened tentatively higher and European stocks rose as investors eased into a hectic week, during which three major central banks set interest rates, President Donald Trump meets North Korea’s leader and Brexit returns to the fore.
The S&P 500 Index gained a bit at the start of trading, led by financials, while the dollar rose with Treasury yields. The mood was cautiously risk-on in Europe, with the Stoxx Europe 600 Index rising for the first time in five days and core European bonds slipping. The euro strengthened and Italian bonds and stocks jumped after the country’s new finance minister confirmed his commitment to the common currency.
The pound fell in what could be a key week for Theresa May’s Brexit strategy, and as data showed a slump in UK manufacturing. Investors are steeling themselves for more geopolitical noise as the week picks up, with Trump saying he feels “ very good” about the summit with Kim Jong-un. After that traders will switch their focus to the views of the world’s biggest central banks. The Federal Reserve is expected to raise interest rates Wednesday, while European Central Bank officials are poised to hold formal talks on ending its bond-buying programme on Thursday. The Bank of Japan meets Friday, with no change to policy expected.
Earlier in Asia, shares in Japan, Hong Kong and South Korea showed modest advances while Chinese stocks underperformed. Australian markets were shut for a holiday. Meanwhile, Canada’s dollar fell in the wake of the G-7 meeting, which ended with deepening tensions over US tariffs and a dispute between Trump and Prime Minister Justin Trudeau.
“The week seems to be starting in risk-friendly, G-7-ignoring mood,” Kit Juckes, a global strategist at Societe Generale SA, wrote in a note. “Maybe the Fed can hike dovishly not to worry markets, maybe we’ll see a temporary easing of euro-tensions let the currency trundle around in a range for a bit, but I’m not in the least inclined to be lulled into a false sense of security. Monday morning trades tell us little.”
Elsewhere, West Texas oil extended a drop in the wake of news that the number of rigs drilling for crude in the US inched up and amid speculation that Russia boosted production. Bitcoin traded near a two-month low following a hacking incident at South Korean cryptocurrency exchange Coinrail.
President Donald Trump and North Korean leader Kim Jong-un meet for an historic summit in Singapore on Tuesday, which will be late Monday in New York. UK Prime Minister Theresa May faces votes that could derail her Brexit policy. Also on Tuesday The Federal Reserve is expected to raise interest rates on Wednesday as the US economy remains solid. The European Central Bank rates decision comes on Thursday with a briefing from President Mario Draghi.
The S&P 500 Index rose 0.1 percent in New York. The Stoxx Europe 600 Index increased 0.4 percent, the largest climb in more than a week. The UK’s FTSE 100 Index jumped 0.5 percent. The MSCI Emerging Market Index gained 0.3 percent.
The Bloomberg Dollar Spot Index increased 0.1 percent, the biggest climb in more than a week. The euro climbed 0.3 percent to $1.1802. The British pound fell 0.2 percent to $1.3383. The Japanese yen dipped 0.3 percent to 109.90 per dollar. The Canadian dollar decreased 0.6 percent to C$1.3007 per dollar.
The yield on 10-year Treasuries advanced two basis points to 2.97 percent. Germany’s 10-year yield increased four basis points to 0.49 percent. Britain’s 10-year yield climbed two basis points to 1.412 percent, the highest in almost three weeks.
West Texas Intermediate crude dipped 0.9 percent to $65.12 a barrel. Gold gained 0.1 percent to $1,299.34 an ounce.