Wednesday , October 16 2019

US stocks slump as trade roils outlook; Treasuries fluctuate

Bloomberg

Futures on US equity indexes ticked lower while the yuan slipped on Monday on concern China may be increasingly reluctant to agree a broad trade deal with the Trump administration.
European stocks gained and Treasuries fluctuated.
Contracts for the three main US gauges came off their session lows but still pointed to a weak start on Wall Street after Bloomberg reported that senior Chinese officials have indicated the range of topics they’re willing to discuss at upcoming talks has narrowed considerably. The Stoxx Europe 600 index climbed as energy and telecoms shares advanced. The pound drifted versus the euro as European leaders cast doubt on reaching a Brexit agreement in time for the UK’s October 31 deadline.
Japanese equities closed little changed, while Shanghai markets are yet to re-open after holidays. Hong Kong was also shuttered for a holiday, leaving traders with limited options to respond — or not — to escalating violence in the city, where protesters set fires and vandalised train stations and banks over the weekend. The yuan dropped in offshore trading by the most since late September.
In the wake of a slew of weak data and with protectionism portrayed as the main impediment to global growth, investor focus will return to foreign trade this week as Chinese Vice Premier Liu He and an entourage of officials head to Washington to resume talks with their US counterparts.
As economic indicators flash warnings, traders have been ramping up bets for further Federal Reserve rate cuts. They’ll search for new clues on the policy path when minutes from the latest Fed meeting are released in coming days.
Elsewhere, West Texas-grade oil advanced following its biggest weekly decline since July.
Chinese Vice Premier Liu He visits Washington for trade talks with his US counterparts.
Fed Chair Jerome Powell speaks on Tuesday on the final day of NABE’s annual conference in Denver; on the following day, minutes are released on the last policy meeting of the Fed’s rate-setting committee.
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi reportedly will meet at an unofficial summit.
The US releases a key measure of inflation on Thursday.
Futures on the S&P 500 Index fell 0.2% in New York. The Stoxx Europe 600 Index climbed 0.4%. Sweden’s OMX Stockholm 30 Index surged 1.1%. Japan’s Topix index was little changed.
The Bloomberg Dollar Spot Index rose 0.1%. The euro was little changed at $1.0984. The Japanese yen strengthened 0.1% to 106.85 per dollar. The offshore yuan weakened 0.3% to 7.1312 per dollar.
The yield on 10-year Treasuries gained less than one basis point to 1.53%. Ireland’s 10-year yield fell one basis point to -0.04%. Germany’s 10-year yield decreased one basis point to -0.60%.
West Texas Intermediate crude jumped 1% to $53.32 a barrel. LME aluminum gained 0.1% to $1,720 per metric ton. LME copper rose 0.4% to $5,667.50 per metric ton.

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