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Bloomberg
US stocks gained but moved off their session highs after Congressional leaders said they’d reached a tentative agreement on a tax overhaul package. The dollar dropped and Treasuries rallied following reports that a measure of US inflation fell short of estimates, only hours before the Federal Reserve was expected to announce its decision on interest rates.
All major equity gauges in the US were up, led by makers of clothing and household products. In Europe, the Stoxx Europe 600 Index slipped, with losses for utilities offsetting gains for retailers. Earlier, benchmarks in Australia, South Korea and Hong Kong rose, while stocks in Tokyo fell.
The dollar halted four days of gains after data showed US consumer inflation picked up in November, though the so-called core gauge, which excludes food and energy costs, unexpectedly slowed. The US Labor Department reported that the producer price index rose more than forecast in November.
“Whatever jitters were aroused by yesterday’s PPI should be allayed by the CPI this morning, where core price pressures remain elusive,†Christopher Low, chief economist at FTN Financial, wrote.
Analysts anticipated the Federal Reserve was expected to raise interest rates after its meeting on Wednesday. The European Central Bank is expected to reveal details of plans to taper asset purchases
on Thursday.
“The markets are going to be trying to interpret the dots, and interpret the dissents, and try to get some sense of what the FOMC is going to look like next year and how they’re going to behave,†said Steven Englander, head of research and strategy at Rafiki Capital Management.
Meanwhile, crude gave up earlier gains and slid below $57 a barrel after the US Energy Information Administration reported that production is rising to keep up with falling inventories. Gold rose with most industrial metals.
The ECB, the BOE and Swiss National Bank set monetary policy at their respective meetings on Thursday. US retail sales data is due on Thursday. European lawmakers continue to debate Brexit and weigh moves on the next step, while North America Free Trade Agreement negotiators meet again.
The S&P 500 Index was up 0.2 percent as of 10:29 am in New York. The Stoxx Europe 600 Index fell 0.2 percent. The UK’s FTSE 100 Index climbed less than 0.1 percent to the highest in almost five weeks. Germany’s DAX Index declined 0.3 percent. The MSCI Asia Pacific Index climbed 0.5 percent.
The Bloomberg Dollar Spot Index declined 0.2 percent, the first retreat in a week. The euro climbed 0.2 percent to $1.1760, the biggest in a week. The British pound gained 0.4 percent to $1.3374. The yield on 10-year Treasuries fell one basis point to 2.3922 percent. Germany’s 10-year yield added less than one basis point to 0.318 percent. Britain’s 10-year yield dropped less than one basis point to 1.219 percent. West Texas Intermediate crude fell 0.6 percent to $56.78 a barrel.