Stocks Climb Globally; Treasuries Fall With Gold: Markets Wrap

Bloomberg.- U.S. equity futures rose alongside stocks in Europe and Asia as traders parsed the latest trade news from Washington and awaited commentary from the Federal Reserve chief. Treasuries fell with European government bonds.

The three main U.S. equity-index contracts pointed to a firm opening on Wall Street. The Stoxx Europe 600 extended its gains to a session high as Bloomberg reported Germany is preparing fiscal stimulus to support its economy if needed. Shares in Hong Kong and China climbed the most in Asia, where jumps across the region were helped by news of Beijing’s plan to reform its interest-rate system and cut borrowing costs.

Treasury 10-year yields continued to rise from multiyear lows reached last week, though they moved off the day’s high levels. A gauge of the dollar ticked up and the pound reversed an early increase. Gold headed toward its first close below $1,500 an ounce in a week.

Investors kicked off Monday on a more positive note after three weeks of declines in global stocks and a series of choppy trading sessions that shook markets from oil to bonds. With the volatility jump in August, traders’ focus will next turn to Fed Chairman Jerome Powell’s address planned at the Kansas Fed’s annual Jackson Hole gathering on Friday, which will be key to gauging whether U.S. policy makers will add to July’s interest-rate cut.

“This week is an opportunity for, in particular, Chair Powell to straighten up the message and show that they are at one and that there is a clear view about where the economy is going,” Anne Anderson, head of fixed income in Sydney for UBS Asset Management Australia, told Bloomberg TV. “This fear needs to be arrested.”

While White House economic director Larry Kudlow said recent phone calls between U.S. and Chinese trade negotiators had been “positive,” President Trump suggested he wasn’t ready to sign a deal and linked the discussions to Hong Kong, saying for the first time on camera that it would be harder to reach a deal if there’s a violent conclusion to the protests.

Elsewhere, crude climbed following a drone attack on oil and gas facilities in Saudi Arabia that underscored geopolitical risk in the Middle East.

Here are some notable events coming up:

  • Minutes of the Fed’s July meeting will provide details on the discussions leading to the first interest-rate cut in a decade when they are released on Wednesday.
  • Thursday brings the Bank Indonesia rate decision and press conference with Governor Perry Warjiyo.
  • Kansas City Federal Reserve Bank hosts its annual central banking symposium in Jackson Hole, Wyoming, starting Thursday. Fed chair Jerome Powell will give remarks on Friday.
  • Flash PMIs are due for the euro area on Thursday.

Here are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index rose 1% as of 8:22 a.m. New York time.
  • The Stoxx Europe 600 Index climbed 1.1%.
  • The U.K.’s FTSE 100 Index gained 1.1%.
  • Germany’s DAX Index jumped 1.4%.
  • The MSCI Asia Pacific Index advanced 0.8%.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.1%.
  • The euro rose 0.1% to $1.1102.
  • The British pound fell 0.2% to $1.2123.
  • The Japanese yen decreased 0.2% to 106.56 per dollar.

Bonds

  • The yield on 10-year Treasuries increased four basis points to 1.59%.
  • The yield on two-year Treasuries climbed three basis points to 1.51%.
  • Britain’s 10-year yield gained one basis point to 0.473%.
  • Germany’s 10-year yield increased three basis points to -0.66%.

Commodities

  • West Texas Intermediate crude rose 0.5% to $55.17 a barrel.
  • Gold decreased 1% to $1,498.54 an ounce.

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