The dollar strengthened as European equities and US equity futures fluctuated as investors focused on Federal Reserve and European Central Bank comments on monetary stimulus prospects.
In Europe, member of the governing council Francois Villeroy de Galhau said the ECB will maintain an easy stance for as long as necessary and US investors were comfortable with the statements of two Federal Reserve officials who pushed back the possibility of reducing bond purchases by a soon.
The president of the Federal Reserve Bank of St. Louis, James Bullard, said overcoming the pandemic remains a political priority, a sentiment echoed by Boston Fed chief Eric Rosengren. This alleviated concerns that the Fed might be heading for a repeat of the so-called taper rage in 2013, when the withdrawal of monetary stimulus triggered volatility among financial markets.
“Coordinated comments from Fed governors” are helping to deflate bond yields, Deutsche Bank AG strategists, including Jim Reid, said in a note to clients. “This year we’ve only had seven business days and we’ve already had a full 360-degree reduction debate from the Fed.”
The European Stoxx 600 was flat, with losses in banks and travel stocks that offset the announcements of mergers and acquisitions.
Among the winners of the day, French supermarket Carrefour SA met 10% after Alimentation Couche-Tard Inc., the convenience store owner of the Circle K chain, said it was exploring a transaction. Telefónica SA also jumped 10% after American Tower Corp. would say he would buy telecommunications towers in Europe and Latin America from the company.
General Motors Co. added 3.6% to pre-trading in the US market. On Tuesday, GM announced plans to get into electric vehicles by creating a wholly-owned company called BrightDrop that will supply battery-powered vans and offer fleet management services.
In Japan, the Nikkei 225 surpassed the results, reaching a record in dollar terms. Shares were also triggered in South Korea, while Hong Kong shares were flat.
New York oil futures rose for a seventh session, to $ 54 a barrel in the longest earnings period since February 2019. The combination of an industry report that points to another decline in U.S. crude stocks, Saudi Arabian production cuts and a weaker dollar while driving excess energy prices.
Here are some key events:
- JPMorgan Chase & Co., Citigroup Inc. i Wells Fargo & Co., as well as companies ranging from Taiwan Semiconductor Manufacturing Co. in Taiwan Infosys Ltd., are among those who have to report earnings.
- The EIA crude inventory report is due Wednesday.
- Christine Lagarde of the European Central Bank speaks online conference wednesday.
- U.S. consumer price inflation figures are due Wednesday.
- U.S. President-elect Joe Biden plans to establish it tax support proposals Thursday.
- Federal Reserve Chairman Jerome Powell participates in a webinar on Thursday.
- Initial U.S. unemployment claims data is due Thursday.
- Retail sales in the US, industrial production, business inventories and consumer sentiment the figures are due to be released on Friday.
These are some of the main movements in the markets:
Stocks
- The futures of the S&P 500 index changed little at 10:56 a.m. in London.
- The Stoxx Europe 600 index changed little.
- The MSCI Asia Pacific index rose 0.5%.
- The MSCI Emerging Market Index rose 0.5%.
Coins
- The Spot Bloomberg Dollar index rose 0.2% to 1,122.20.
- The euro fell 0.2% to $ 1,2179.
- The British pound rose 0.1% to $ 1.3672.
- The Japanese yen weakened 0.2% to $ 103.94.
Good
- The 10-year Treasury yield fell one basis point to 1.12%.
- The two-year Treasury yield rose less than one basis point to 0.15%.
- Germany’s ten-year yield fell three basis points to -0.49%.
- The UK’s ten-year yield fell two basis points to 0.335%.
Commodities
- West Texas crude oil gained 0.2% to $ 53.36 a barrel.
- Gold strengthened 0.1% to $ 1,855.23 an ounce.
– With the assistance of Steve Matthews and Vivien Lou Chen