US futures drift as stocks in Europe, Asia advance

Bloomberg

US stock-index futures drifted, failing to pick up momentum from a broad advance in equities in Europe and Asia after more signs emerged that China will move to lessen the trade war’s repercussions. Oil futures rose with the dollar.
Gains in the Stoxx Europe 600 Index came in part from the strong rotation into cyclical sectors that had lagged behind this year, such as automaker and banking shares.
Contracts on the three main US equity indexes all fluctuated. Treasury 10-year notes and similar German bunds drifted, after their yields on Wednesday touched one-month highs. heading for its biggest drop in eight sessions.
Equities jumped in Japan and Hong Kong after an influential newspaper editor said China will implement measures to ease the trade war’s
impact on the world’s second-biggest economy. The moves planned by Beijing will benefit some companies from China and the US, Global Times editor Hu Xijin said in a Twitter post. Japan’s currency dropped for a third straight session.
Equities are rebounding in September on hopes for fresh monetary stimulus from the European Central Bank on Thursday and the Federal Reserve next week, while market-supportive measures by China helped lift sentiment.
Strong monetary easing is not a given, though, with some investors dialing back their expectations of accommodation and bond traders pulling back from the more bullish sentiment of August.
“We are primed for a little bit of disappointment,” Jeff Boswell, a fund manager at Investec Asset Management, told Bloomberg TV in Singapore. “On the QE front, whilst we’ve been expectant of something — certainly on the corporate bond-buying side that the market’s been expecting — it is unlikely to come tomorrow.”
Elsewhere, oil futures climbed alongside gold. South Korean infrastructure shares outperformed after the departure of President Donald Trump’s national security adviser, spurring speculation the US may show conciliatory gestures toward China and North Korea.
OPEC’s monthly oil market report, which includes demand forecasts and production estimates, was expected on Wednesday.
The ECB policy meeting on Thursday is widely expected to see a cut to interest rates and a review of all options, including QE. Policy makers will also publish forecasts for growth and inflation. ECB President Mario Draghi will hold a press conference.
US data for August is due on producer prices on Wednesday, and CPI on Thursday.
Futures on the S&P 500 Index rose 0.1 percent in New York. The Stoxx Europe 600 Index rose 0.7 percent. The UK’s FTSE 100 Index jumped 1 percent. The MSCI Asia Pacific Index increased 0.9 percent.
The Bloomberg Dollar Spot Index edged 0.1 percent higher. The British pound rose 0.1 percent to $1.2358. The euro sank 0.2 percent to $1.1019. The Japanese yen weakened 0.2 percent to 107.72 per dollar. The yield on 10-year Treasuries declined two basis points to 1.71 percent. The yield on two-year Treasuries decreased one basis point to 1.67 percent. Germany’s 10-year yield fell less than one basis point to -0.55 percent. Australia’s 10-year yield gained six basis points to 1.144 percent.
West Texas Intermediate crude increased 1.2 percent to $58.10 a barrel. Gold increased 0.5 percent to $1,492.65 an ounce.