Stocks Climb as Yields Hold Steady; Dollar Falls: Markets Wrap

News Team

7 years ago

European and Asian shares advanced while U.S. equity futures climbed as benchmark Treasury yields held steady below 2.9 percent and the dollar weakened. Investor focus is shifting back to U.S. monetary policy, with two appearances set for this week from new Federal Reserve Chairman Jerome Powell.

The Europe Stoxx 600 Index jumped to its highest level in more than three weeks, with nearly all major industry groups rallying. The dollar retreated for a third session as the pound and euro strengthened while the yen firmed to a one-week high. Russia’s ruble appreciated the most in emerging markets after S&P Global Ratings boosted its credit score to investment grade. Gold climbed and European sovereign bonds were mixed.

Powell may help set a new direction for investors at a time when some of the biggest names in markets are at odds over the implications of this month’s surge in U.S. bond yields. Morgan Stanley put out a bullish call on Treasuries Monday, countering warnings on the securities from Goldman Sachs Group Inc. and Warren Buffett. Bond traders are still pricing less than the three quarter-point interest-rate hikes that Fed officials have signaled as likely this year.

Elsewhere, Bank of Japan Governor Haruhiko Kuroda said the central bank has no plan to overhaul its current form of easing, adding that he saw no need to do another comprehensive assessment of the effectiveness of the bank’s policies. Oil futures steadied as Saudi Oil Minister Khalid Al-Falih said OPEC and its allies may ease output curbs in 2019 in a way that won’t disturb the market. Bitcoin fluctuated around $9,500.

Terminal users can read more in our markets blog.

Here are some key events scheduled for this week:

ECB President Mario Draghi speaks in Brussels on Monday.
Bank of Korea has policy decision and briefing on Tuesday.
Powell testifies before a House panel on Tuesday. He’ll discuss the Fed’s Semi-Annual Monetary Policy Report and the state of the economy. Powell returns on March 1 before a Senate committee.
Companies announcing earnings this week include: Vale, BASF, Standard Chartered, Bayer, Lowe’s, Galaxy Entertainment Group, Anheuser-Busch InBev, Peugeot, WPP, and London Stock Exchange Group.
U.K. Prime Minister Theresa May delivers a speech on Britain’s relationship with the European Union after Brexit.
A barrage of data is expected out of Japan including retail sales and industrial production Wednesday, and capital spending Thursday.
In China, the official and Caixin purchasing managers’ indexes on Wednesday and Thursday respectively may show growth momentum slowed slightly in February, though the signal may be clouded by the holidays.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index gained 0.5 percent as of 6:38 a.m. New York time, the highest in more than three weeks.
Futures on the S&P 500 Index increased 0.3 percent to the highest in more than three weeks.
The MSCI Asia Pacific Index climbed 0.8 percent to the highest in more than three weeks.

Currencies

The euro rose 0.4 percent to $1.2339.
The British pound gained 0.6 percent to $1.405 on the largest climb in more than a week.
The Japanese yen appreciated 0.2 percent to the strongest in a week.
The Russian ruble increased 1 percent to the strongest in more than three weeks on the largest increase in more than a week.

Bonds

The yield on 10-year Treasuries fell one basis point to 2.86 percent, the lowest in almost two weeks.
Germany’s 10-year yield rose less than one basis point to 0.65 percent, the biggest advance in a week.

Commodities

West Texas Intermediate crude dipped 0.1 percent to $63.46 a barrel.
Gold climbed 0.8 percent to $1,338.80 an ounce, the highest in a week on the biggest increase in more than a week.