Stocks Steady, U.S. Futures Rise Before Powell: Markets Wrap

 Stocks Steady, U.S. Futures Rise Before Powell: Markets Wrap

(Bloomberg) — U.S. equity-index futures advanced and European stocks were steady ahead of Friday’s key Federal Reserve gathering that may offer clues about the timeline for tapering stimulus.

The Stoxx Europe 600 index was little changed, remaining on track for a seventh straight month of gains, which would be the longest streak in eight years. MSCI Inc.’s Asia-Pacific gauge eked out a gain, with stocks climbing in China, where the central bank supported sentiment after signaling targeted steps to cushion the economy.

Treasury yields edged lower and the dollar slipped as traders awaited Fed Chair Jerome Powell’s speech at the Jackson Hole symposium, with data on personal consumption and spending before that also on the radar. A flood of Treasury options expiring Friday raise the prospect for volatility after Powell’s remarks. Some Fed officials overnight said the time to start tapering stimulus is near, weighing on the S&P 500, which dipped from a record.

President Joe Biden’s advisers are considering backing Powell for a second term, people familiar with the matter said, a step that could bolster expectations of continuity in accommodative monetary policy.

The recovery from the pandemic and still-elevated inflation are supporting calls for monetary policy normalization. But the recent spread of the delta virus strain has complicated economic reopening. Markets are waiting to see how Powell balances these competing factors in his comments.

While investor mood ahead of Jackson Hole “arguably points to an accommodative enough Fed tilt to keep markets buoyed, thin trading in the U.S. bond markets this week suggests latent caution, and sideline bias in search of more clarity,” Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore, wrote in a note.

Among Fed officials, Dallas President Robert Kaplan said he favors the start of tapering in October or shortly after. St. Louis’s James Bullard called for a start in the fall. Kansas City Fed’s Esther George urged an early move to begin this year. None of them vote on policy in 2021.

West Texas Intermediate crude headed toward its best week since October. Gold climbed past $1,800 an ounce. Bitcoin steadied around $47,000.

Here are some events to watch this week:

Fed officials participate in the Jackson Hole Economic Policy Symposium on Friday.July U.S. personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.

For more market analysis read our MLIV blog.

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 was little changed as of 8:20 a.m. London timeFutures on the S&P 500 rose 0.3%Futures on the Nasdaq 100 rose 0.3%Futures on the Dow Jones Industrial Average rose 0.3%The MSCI Asia Pacific Index was little changedThe MSCI Emerging Markets Index was little changed

Currencies

The Bloomberg Dollar Spot Index was little changedThe euro rose 0.1% to $1.1765The Japanese yen was little changed at 110.00 per dollarThe offshore yuan was little changed at 6.4809 per dollarThe British pound was little changed at $1.3709

Bonds

The yield on 10-year Treasuries declined one basis point to 1.34%Germany’s 10-year yield was little changed at -0.42%Britain’s 10-year yield was little changed at 0.60%

Commodities

Brent crude rose 1.7% to $72.25 a barrelSpot gold rose 0.6% to $1,803.82 an ounce

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Related post