Stocks drop with US futures; Treasuries edge up with gold

Bloomberg

US equity-index futures retreated alongside stocks in Europe as investors turned cautious in the countdown to major central bank meetings and a deadline for fresh American tariffs on Chinese goods. Treasuries gained with gold.
Contracts for the three main US gauges all dropped as traders await news on whether Washington will go ahead with a planned December 15 tariff hike on imports from China. The Stoxx Europe 600 Index was on course for its biggest decline in a week as 18 of 19 industry sectors slipped.
The pound rose ahead of a key political poll and just two days before a general election dominated by Brexit. European bonds drifted lower and the euro rose after French and
German economic data beat expectations.
Investors appear to be trimming risk-on positions before a slew of significant events in the next few days, from Federal Reserve and European Central Bank policy meetings to a general election in Britain. The biggest focus arguably remains on whether the US and China can avert a new round of protectionist duties slated for December 15.
“The idea that we have a relatively calmer period of time in the US-China trade tensions is obviously very important,” Ben Powell, BlackRock Investment Institute’s chief Asia-Pacific strategist, said. However, “this is just a temporary period of relative calm,” he said. “The tensions between the US and China are structural and persistent.”
Elsewhere, crude-oil futures nudged lower and emerging-market shares slipped. In Asia earlier, a regional benchmark declined overall in below-average volumes but shares in South Korea and China bucked the broader retreat. Japan’s 10-year bond yield rose above zero for the first time since March before reversing.
Futures on the S&P 500 Index dipped 0.4% as of 7:18 am New York time. The Stoxx Europe 600 Index decreased 1.1%. Germany’s DAX Index sank 1.5%. South Korea’s Kospi index gained 0.4%. The MSCI Asia Pacific Index decreased 0.2%.
The Bloomberg Dollar Spot Index dipped 0.1%. The British pound edged up 0.2% to $1.3172. The euro rose 0.2% to $1.1082. The Japanese yen was little changed at 108.53 per dollar. The Indian rupee rose 0.2% to 70.926 per dollar.
The yield on 10-year Treasuries fell two basis points to 1.80%. Germany’s 10-year yield climbed less than one basis point to -0.30%. Britain’s 10-year yield increased one basis point to 0.781%. Japan’s 10-year yield declined one basis point to -0.013%.
West Texas Intermediate crude sank 0.6% to $58.66 a barrel. Gold rose 0.4% to $1,467.71 an ounce. LME nickel fell 2.4% to $13,020 per metric ton.