U.S. Stock Futures Dip; Treasuries Climb With Oil: Markets Wrap

(Bloomberg) — U.S. equity futures slipped with stocks as traders parsed European manufacturing data and awaited an address by the Federal Reserve chief on Friday. Treasuries edged higher with oil, while gold dipped.

Contracts on the three main U.S. equity indexes turned lower after fluctuating earlier in the session. The Stoxx Europe 600 Index also fell, after briefly jumping along with the euro on a strong PMI report from France. Trading activity in the U.S. has been light this week ahead of Fed Chairman Jerome Powell’s address on Friday at the annual Jackson Hole gathering. Earlier in Asia, Hong Kong shares saw the biggest drop while China edged higher and Japan closed flat. European sovereign bonds fluctuated after the regional manufacturing data.

Traders are looking forward to Powell’s speech tomorrow while digesting the diverse views from Fed officials found in the previous meeting’s minutes, which highlight the difficult choices they face before the next policy decision in September. Investors expect another rate cut next month and further easing this year. Meanwhile, President Donald Trump kept up his relentless attack on the central bank, claiming that “the only problem we have is Jay Powell and the Fed.” On trade, he predicted the U.S. will “probably” make a deal.

“What I think we are going to get out of Jackson Hole is a shift towards the Fed getting more flexibility and optionality,” Jack McIntyre, fixed-income portfolio manager at Brandywine Global Investment Management LLC, told Bloomberg TV. “What I mean by that is maybe sending a message to the market that they’re open to, hey, this might be a more prolonged rate-cutting cycle.”

Elsewhere, West Texas oil futures headed for their first increase in three sessions, while the British pound held its drop from Wednesday, when speculation of a so-called no-deal Brexit increased.

Here are some notable events coming up:

Minutes from the ECB’s last meeting are due ThursdayFlash PMIs are due for the U.S. on ThursdayKansas City Federal Reserve Bank hosts its annual central banking symposium in Jackson Hole, Wyoming, starting Thursday.

Here are the main moves in markets:

Stocks

The Stoxx Europe 600 Index dipped 0.3% as of 6:25 a.m. New York time.Futures on the S&P 500 Index decreased 0.2%.Spain’s IBEX Index rose 0.4%.The U.K.’s FTSE 100 Index sank 0.5%.The MSCI Asia Pacific Index declined 0.3%.

Currencies

The euro dipped 0.1% to $1.1078.The Bloomberg Dollar Spot Index climbed 0.1%.The Japanese yen rose 0.2% to 106.36 per dollar.The MSCI Emerging Markets Currency Index declined 0.2% to 1,602.99.

Bonds

The yield on 10-year Treasuries decreased one basis point to 1.58%.The yield on two-year Treasuries dipped one basis point to 1.56%.Germany’s 10-year yield rose two basis points to -0.66%.Britain’s 10-year yield gained one basis point to 0.49%.

Commodities

Iron ore rose 4.9% to $81.68 per metric ton.Gold decreased 0.4% to $1,496.18 an ounce.LME zinc dipped 1.8% to $2,248.50 per metric ton.West Texas Intermediate crude increased 0.6% to $56.03 a barrel.

–With assistance from David Wilson, Paul Allen and Adam Haigh.

To contact the reporter on this story: Todd White in Madrid at [email protected]

To contact the editors responsible for this story: Christopher Anstey at [email protected], Yakob Peterseil

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