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Bloomberg
US equity futures rose alongside stocks in Europe and Asia as traders parsed the latest trade news from Washington and awaited commentary from the Federal Reserve chief. Treasuries fell with European government bonds.
The three main US equity-index contracts advanced with the Stoxx Europe 600, which extended its gains to a session high as Bloomberg reported Germany is preparing fiscal stimulus to support its economy if needed. Shares in Hong Kong and China climbed the most in Asia, where jumps across the region were helped by news of Beijing’s plan to reform its interest-rate system and cut borrowing costs. Treasury 10-year yields continued to rise from multiyear lows reached last week. A dollar gauge ticked higher and the pound reversed an early increase. Gold fell, hovering back around the $1,500 level.
Investors kicked off on Monday on a more positive note after three weeks of declines in global stocks and a series of choppy trading sessions that shook markets from oil to bonds. With volatility jumping in August, traders’ focus will turn to Fed Chairman Jerome Powell’s address planned at the Kansas Fed’s annual Jackson Hole gathering on Friday, which will be key to gauging whether US policy makers will add to July’s interest-rate cut.
“This week is an opportunity for, in particular, Chair Powell to straighten up the message and show that they are at one and that there is a clear view about where the economy is going,†Anne Anderson, head of fixed income in Sydney for UBS Asset Management Australia, told Bloomberg TV.
While White House economic director Larry Kudlow said recent phone calls between US and Chinese trade negotiators had been “positive,†President Trump suggested he wasn’t ready to sign a deal and linked the discussions to Hong Kong, saying for the first time on camera that it would be harder to reach a deal if there’s a violent conclusion to the protests.
Minutes of the Fed’s July meeting will provide details on the discussions leading to the first interest-rate cut in a decade when they are released on Wednesday.
Thursday brings the Bank Indonesia rate decision and press conference with Governor Perry Warjiyo. Kansas City Federal Reserve Bank hosts its annual central banking symposium in Jackson Hole, Wyoming, starting on Thursday. Fed chair Jerome Powell will give remarks on Friday.
Flash PMIs are due for the euro area on Thursday.
Futures on the S&P 500 Index rose 1 percent in New York. The Stoxx Europe 600 Index climbed 1 percent. The UK’s FTSE 100 Index increased 1.1 percent. Germany’s DAX Index increased 1.3 percent. The MSCI Asia Pacific Index gained 0.8 percent.
The Bloomberg Dollar Spot Index rose 0.1 percent. The euro rose 0.2 percent to $1.1107. The British pound fell 0.2 percent to $1.2124. The Japanese yen weakened 0.2 percent to 106.57 per dollar.
The yield on 10-year Treasuries increased six basis points to 1.61 percent. The yield on two-year Treasuries rose four basis points to 1.51 percent. Britain’s 10-year yield gained three basis points to 0.497 percent. Germany’s 10-year yield jumped five basis points to -0.64 percent.
West Texas Intermediate crude gained 0.7 percent to $55.25 a barrel. Gold sank 0.9 percent to $1,500.30 an ounce.