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The dollar declined and Treasury yields steadied as investors digested news that President …
Dollar Drops as Powell Set for Fed Nod; Bonds Slip: Markets Wrap
By and
Updated on
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President Trump said to pick Jerome Powell for Fed chairman
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Focus remains on U.S. tax reform; BOE expected to raise rates
Robeco’s Arnout van Rijn discusses President Trump’s pick to be the next Fed chair and his outlook for Asian markets.
The dollar declined and Treasury yields steadied as investors digested news that
President Donald Trump will pick Jerome Powell to lead the Federal
Reserve. European stocks drifted, the euro rose and bonds in the region
nudged lower.
The Stoxx Europe 600 was little changed with real estate and telecom stocks outperforming and travel shares lagging. Asian shares were mixed as a rally that drove prices to the highest level in 10 years showed signs of tiring. Sterling rose ahead of Thursday’s Bank of England meeting, where policy makers are expected to raise interest rates for the first time in more than a decade. Oil fell close to $54 a barrel as U.S. crude stockpiles resumed declines but production expanded. Industrial metals pared some of yesterday’s rally.
Trump will nominate Fed Governor Powell to the top job at the U.S. central bank on Thursday at 3 p.m. Washington time, according to four people familiar with the decision. Powell is seen by investors as a continuity candidate and has generally backed current chair Janet Yellen’s cautious approach to withdrawing stimulus. The succession question overshadowed the Fed’s policy statement Wednesday, where it subtly upgraded its assessment of the economy and reinforced expectations of a December interest-rate hike.
The progress toward American tax reform is also on most investors’ radars, alongside corporate earnings and Friday’s U.S. jobs report. There have been conflicting reports about when and how the U.S. tax rate on companies would be lowered. House Republican leaders plan to unveil a bill Thursday that would cut the corporate tax rate to 20 percent -- though it may not stay there.
Elsewhere, bitcoin extended gains for the fourth consecutive day, hitting $7,000 to establish a fresh record.
Terminal users can read more in our Markets Live blog.
Here are some of the remaining scheduled events this week:
The Stoxx Europe 600 was little changed with real estate and telecom stocks outperforming and travel shares lagging. Asian shares were mixed as a rally that drove prices to the highest level in 10 years showed signs of tiring. Sterling rose ahead of Thursday’s Bank of England meeting, where policy makers are expected to raise interest rates for the first time in more than a decade. Oil fell close to $54 a barrel as U.S. crude stockpiles resumed declines but production expanded. Industrial metals pared some of yesterday’s rally.
Trump will nominate Fed Governor Powell to the top job at the U.S. central bank on Thursday at 3 p.m. Washington time, according to four people familiar with the decision. Powell is seen by investors as a continuity candidate and has generally backed current chair Janet Yellen’s cautious approach to withdrawing stimulus. The succession question overshadowed the Fed’s policy statement Wednesday, where it subtly upgraded its assessment of the economy and reinforced expectations of a December interest-rate hike.
The progress toward American tax reform is also on most investors’ radars, alongside corporate earnings and Friday’s U.S. jobs report. There have been conflicting reports about when and how the U.S. tax rate on companies would be lowered. House Republican leaders plan to unveil a bill Thursday that would cut the corporate tax rate to 20 percent -- though it may not stay there.
Elsewhere, bitcoin extended gains for the fourth consecutive day, hitting $7,000 to establish a fresh record.
Terminal users can read more in our Markets Live blog.
Here are some of the remaining scheduled events this week:
- Trump starts an 11-day trip to Asia, his first as president, on Friday. Trade and security issues -- particularly North Korea -- will probably be in focus.
- The slew of earnings releases will culminate with Apple Inc. results.
Stocks
- The Stoxx Europe 600 Index dipped less than 0.05 percent as of 8:16 a.m. London time.
- The U.K.’s FTSE 100 Index declined less than 0.05 percent to the lowest in more than a week.
- Germany’s DAX Index sank 0.1 percent.
- Japan’s Nikkei 225 Stock Average climbed 0.5 percent to the highest in more than 21 years.
- The MSCI Asia Pacific Index jumped 0.1 percent to the highest in about 10 years.
- The MSCI Emerging Market Index rose less than 0.05 percent to the highest in more than two weeks.
- Futures on the S&P 500 Index decreased 0.1 percent to 2,572.00.
Currencies
- The Bloomberg Dollar Spot Index declined 0.1 percent.
- The euro climbed 0.2 percent to $1.1638.
- The British pound rose 0.2 percent to $1.3265.
- The Japanese yen increased 0.1 percent to 114.11 per dollar.
Bonds
- The yield on 10-year Treasuries declined less than one basis point to 2.37 percent.
- Germany’s 10-year yield rose one basis point to 0.39 percent, the highest in a week.
- Britain’s 10-year yield climbed one basis point to 1.357 percent, the highest in a week.
- Japan’s 10-year yield declined one basis point to 0.055 percent, the lowest in four weeks.
Commodities
- West Texas Intermediate crude fell 0.3 percent to $54.11 a barrel.
- Gold increased 0.1 percent to $1,276.31 an ounce, the highest in more than a week.
- Copper declined 0.2 percent to $3.14 a pound.
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