US futures, Europe stocks edge down; bonds climb

Bloomberg

American equity-index futures edged lower along with European stocks as investors awaited the start of US earnings season and officials prepared to sign the China trade deal in Washington. The yuan held close to its strongest level since July.
Contracts on Wall Street’s main equity benchmarks traded modestly down, after January14’s jump in technology shares sent the S&P 500 and Nasdaq Composite indexes to record highs.
The Stoxx Europe 600 Index also drifted lower, with losses in banks offsetting gains in retail and mining shares. Asia stocks were slightly higher, though they trimmed gains as data showed China’s trade with the US slumped last year.
The Chinese yuan held most of its surge from January 13, when Washington lifted its designation of the country as a currency manipulator. Treasuries nudged up, and the dollar rose versus its biggest peers. The pound flirted with a possible sixth day of declines, which would be the longest losing streak since May.
Investors are catching their breath after a surge in optimism ahead of the signing of the first-phase trade deal between the world’s biggest economies and after Washington’s lifting of
the currency-manipulator label from Beijing. The direction of travel from here may hinge on the earnings season, which begans on Tuesday with results from Wall Street giants JPMorgan Chase & Co and Citigroup Inc, though Sino-US trade remained in the picture.
“The next step is really whether the two countries adhere to the trade agreement and what the details of that trade agreement are,” Laura Foll, portfolio manager at Janus Henderson Investors, told Bloomberg TV. “And following on from that, how phase two of the negotiations go.”
Phase one of the US-China trade deal is set to be signed on Wednesday in Washington.
The biggest American financial institutions kick off earnings season, including JPMorgan Chase & Co, Citigroup Inc, Wells Fargo & Co, Bank of America Corp, Goldman Sachs Group Inc, Morgan Stanley and BlackRock.
The Fed’s so-called beige book is due on Wednesday. China GDP comes on Friday.
Futures on the S&P 500 Index decreased 0.2% in New York. The Stoxx Europe 600 Index fell 0.2%. Nasdaq 100 Index futures dipped 0.3%. The MSCI Asia Pacific Index gained 0.3%.
The Bloomberg Dollar Spot Index jumped 0.1%. The British pound was little changed at $1.2986. The euro was steady at $1.1133. The yield on 10-year Treasuries dipped one basis point to 1.83%. Germany’s 10-year yield fell one basis point to -0.17%. Britain’s 10-year yield declined two basis points to 0.726%. Japan’s 10-year yield climbed two basis points to 0.016%.
West Texas Intermediate crude climbed 0.4% to $58.32
a barrel. Gold dipped 0.1% to $1,545.81 an ounce. Silver weakened 0.9% to $17.80 per ounce.