Stocks mixed on global-trade fears; pound drops on Brexit

Bloomberg

Stocks were steady in Europe on Monday while US futures climbed and emerging market shares dropped as investors assessed the complex outlook for international trade. The pound fell as the UK’s flagship Brexit proposal came under attack.
Gains in energy shares were offset by declines in automakers and construction firms in thin trading on the Stoxx Europe 600 Index, following a downbeat session in Asia. Euro-area manufacturers saw the slowest order growth in two years after worries over trade hit confidence. The UK’s FTSE 100 Index bucked the broader market, climbing as the pound weakened. A Bloomberg gauge of the dollar rose.
Argentina and Turkey are proving the latest epicenters for crises that are denting sentiment across emerging markets, which have underperformed developed markets after a stronger dollar and tighter trade policies sent shock waves from China to Brazil. US stocks remain a point of light, reaching record highs last month even as the Federal Reserve prepares to raise interest rates again later in September.
“My view is to continue trading on the trends — staying bearish on emerging markets,” Chris Weston, head of research at Pepperstone Financial Pty Ltd., told Bloomberg TV from Melbourne.
“We need to see a perception of the US dollar going lower and clarity that the trade tensions are coming to some sort of a close.
I don’t think we’re there yet.” Turkey’s central bank signalled higher interest rates are in the offing after inflation jumped, though it only briefly pared the currency’s drop.
Elsewhere, copper steadied after last week’s losses and oil climbed. Futures on the Dow, S&P and Nasdaq were higher, with exchanges closed on Monday for the Labor Day holiday. Argentina’s peso fell as the country announced taxes on exporters to boost revenue.
Bank of England governor Mark Carney on Tuesday testifies on the August inflation report and policy decision. Executives from Facebook, Twitter and Google on Wednesday testify on social media, Russia meddling. US PMI data are due Tuesday, and employment reports for August are set to follow Friday.
The Stoxx Europe 600 Index decreased less than 0.05 percent in London. Futures on the S&P 500 Index gained 0.2 percent. The MSCI All-Country World Index dipped 0.2 percent to the lowest in more than a week. The MSCI Emerging Market Index fell 0.9 percent to the lowest in almost two weeks.
The Bloomberg Dollar Spot Index gained 0.1 percent to the highest in more than a week. The euro climbed 0.1 percent to $1.161. The Japanese yen dipped 0.1 percent to 111.13 per dollar.
The Turkish lira sank 1.5 percent to 6.6374 per dollar. South Africa’s rand fell 1.5 percent to 14.9105 per dollar, the weakest in more than two years.
The MSCI Emerging Markets Currency Index fell 0.2 percent to the lowest in more than two weeks.
Britain’s 10-year yield dipped two basis points to 1.427 percent, the lowest in a week. Germany’s 10-year yield decreased less than one basis point to 0.33 percent, the lowest in two weeks.
The spread of Italy’s 10-year bonds over Germany’s declined two basis points.
The Bloomberg Commodity Index increased 0.1 percent. West Texas Intermediate crude advanced 0.4 percent to $70.05 a barrel. LME copper decreased 0.1 percent to $5,967.00 per metric ton, the lowest in more than two weeks.
Gold declined 0.2 percent to $1,200.71 an ounce.