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Bloomberg
The euro weakened as investors watched and waited for the next big development in Spain, where Catalan separatists are planning their response after Prime Minister Mariano Rajoy moved to stamp his authority on the region. Candidates for the Fed chief and the odds of US tax reform remain in focus as the dollar rose a second day.
The common currency’s slip added support to European stocks, which climbed even as Spanish shares underperformed and after a mixed session in Asia. In Japan, Shinzo Abe’s election victory sent the Nikkei to the longest winning streak on record and the yen to its weakest since July. Europe’s bonds were broadly stronger as Treasuries steadied. West Texas crude fluctuated before rising after OPEC reported record compliance with pledged production cuts.
There’s no shortage of potential catalysts out there for investors this week, from the election in Japan to the boiling Catalonia crisis and very different moves towards autonomy in parts of Italy. Away from politics central banks loom large, with a pivotal European Central Bank meeting due and the possible unveiling of President Donald Trump’s pick for Fed chair. Traders will also be watching US growth data and Trump’s efforts to overhaul America’s tax code.
UK Prime Minister Theresa May was expected to make a statement to Parliament on Monday on the progress of Brexit talks following the latest European Union summit. The US economy probably expanded at about a 2.5 percent annualised pace in the third quarter, restrained in part by the effects of two hurricanes, economists forecast the government to report. Among other US data this week, orders for big-ticket durable goods probably increased in a sign of firmer manufacturing growth. Australia updates on third-quarter inflation on Wednesday, while South Korea reports on GDP and Hong Kong on imports and exports. Japan reports on CPI later in the week. The European Central Bank holds a policy meeting on Thursday at which it’s expected to announce its stimulus plan for 2018. Brazil, Argentina, Russia and Canada announce rate decisions in the coming days.
The Stoxx Europe 600 Index jumped 0.2 percent as of 8:51 am New York time. The MSCI All-Country World Index declined less than 0.05 percent. The UK’s FTSE 100 Index climbed 0.1 percent. Germany’s DAX Index jumped 0.2 percent. The MSCI Emerging Market Index dipped 0.1 percent. Futures on the S&P 500 Index rose 0.1 percent, reaching the highest on record with its seventh straight advance. The Bloomberg Dollar Spot Index climbed 0.2 percent to the highest in more than 14 weeks. The euro dipped 0.4 percent to $1.1734, the weakest in more than two weeks.
The yield on 10-year Treasuries declined one basis point to 2.38 percent. Britain’s 10-year yield fell two basis points to 1.331 percent.
Japan’s Topix index climbed 0.8 percent, cementing a rally to the highest since mid 2007. The Nikkei jumped to once again hit the highest since 1996. MSCI’s Asia Pacific Index added 0.1 percent. South Korea’s Kospi index was little changed. Hong Kong’s Hang Seng fell 0.6 percent. Australia’s S&P/ASX 200 lost 0.2 percent.