European Stocks Drop; Treasuries and Dollar Steady: Markets Wrap

Publikuota: 2018-02-02 10:38
Toru Hanai („Reuters“ / „Scanpix“) nuotr.
Toru Hanai („Reuters“ / „Scanpix“) nuotr.
 

Stocks in Europe declined following a mixed session in Asia as rising pressure on bond yields round the world stirred the Bank of Japan into action to keep rates from getting out of whack with policy targets.

The Stoxx Europe 600 Index dropped for a fifth straight day, the longest streak since November, with all but one industry sector in the red. The MSCI Asia Pacific Index headed for the worst weekly performance since 2016, after Google parent Alphabet Inc. missed earnings estimates and Apple Inc. forecast lower-than-expected revenue. Futures on the S&P 500 also slipped as the dollar recovered and Treasuries steadied. The euro traded little changed and German bund yields inched higher.

Traders will now be looking to U.S. jobs data, which may offer support to both stocks and bonds if the trend of healthy growth in hiring but low wage inflation continues. Equities are being tested by the surge in bond yields, with some fund managers saying 3 percent U.S. 10-year rates would signal a bond bear market. The level is seen by many stock-watchers as a potential trigger for a correction in equities.

“It’s going to depend on the pace of the move," Geoff Lewis, Hong Kong-based senior strategist for Asia at Manulife Asset Management, said on Bloomberg Television. "If we see a sharp move up that would be a negative shock for the equity markets. With such low volatility -- complacency perhaps -- its possible that that could be quite a sharp correction."

Elsewhere, oil traded near its highest level since 2015 in New York as forecasters paint a rosier picture for supply and demand. Bitcoin continues to slide after a miserable January, falling below $9,000.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index decreased 0.4 percent as of 8:12 a.m. London time, hitting the lowest in a month with its fifth consecutive decline. The U.K.’s FTSE 100 Index fell 0.1 percent. Germany’s DAX Index dipped 0.7 percent. The S&P 500 Index declined 0.1 percent. The MSCI Asia Pacific Index fell 0.4 percent as of 4:22 p.m. Tokyo time. Topix index fell 0.3 percent, Hong Kong’s Hang Seng Index rose 0.1 percent, the Kospi index declined 1.7 percent, Australia’s S&P/ASX 200 Index rose 0.5 percent.

Currencies

The Bloomberg Dollar Spot Index climbed 0.2 percent. The euro declined less than 0.05 percent to $1.2508. The British pound fell 0.1 percent to $1.4245. The Japanese yen dipped 0.4 percent to 109.79 per dollar, the weakest in more than a week.

Bonds

The yield on 10-year Treasuries declined less than one basis point to 2.79 percent. Germany’s 10-year yield climbed two basis points to 0.74 percent, the highest in more than two years. Britain’s 10-year yield increased three basis points to 1.531 percent. Japan’s 10-year yield declined one basis point to 0.086 percent, the largest drop in 11 weeks.

Commodities

West Texas Intermediate crude climbed 0.4 percent to $66.08 a barrel, the highest in a week. Gold declined less than 0.05 percent to $1,348.04 an ounce. Copper rose 0.8 percent to $3.24 a pound, the highest in more than four weeks.

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