US stocks, futures drift lower before Fed meet; bonds climb

Bloomberg

Stocks slipped with US equity futures before the Federal Reserve’s final policy decision of the year and amid lingering uncertainty over the progress of trade negotiations between America and China. Treasuries advanced.
The Stoxx Europe 600 Index declined, led lower by media and real estate shares. Contracts on the main US equity gauges also drifted lower as traders awaited the Fed meeting, where policy makers are widely expected to keep rates unchanged. Shares gained in Seoul, Shanghai and Hong Kong and slipped in Tokyo after White House adviser Peter Navarro said he had no indication that President Donald Trump will do “anything other than have a great deal or put the tariffs on.”
The dollar strengthened against most of its major peers, while the pound edged down after Prime Minister Boris Johnson’s lead in Britain’s general election was slashed by more than half in a closely watched opinion poll released two days before the country votes.
With the world’s top two economies still wrangling over an interim deal, Thursday may bring news as Trump is expected to meet with his trade team, according to people familiar with the talks. As for interest rates, the Fed’s Open Market Committee is expected to avoid signaling a further reduction is on the immediate horizon when it delivers a verdict.
“The markets have become numb to the noise” on trade, Burns McKinney, Allianz Global portfolio manager, said on Bloomberg TV. “The FOMC meeting, the election in the U.K. and then later this week the December 15 deadline are all factors that I think the markets have generally not priced in any bad news.”
Elsewhere, oil-producing giant Saudi Aramco jumped 10%, the daily limit, in its trading debut in Riyadh. Crude oil futures slipped in New York trading.
Futures on the S&P 500 Index were little changed as of 9:57 a.m. London time. The Stoxx Europe 600 Index dipped 0.2%. The MSCI Asia Pacific Index gained 0.3%. The MSCI Emerging Market Index advanced 0.5%.
The Bloomberg Dollar Spot Index increased 0.1%. The euro declined 0.1% to $1.1084. The British pound sank 0.1% to $1.3142. The onshore yuan weakened 0.1% to 7.041 per dollar. The Japanese yen was little changed at 108.69 per
dollar.
The yield on 10-year Treasuries declined two basis points to 1.82%. The yield on two-year Treasuries fell two basis points to 1.63%. Germany’s 10-year yield declined two basis points to -0.32%. Britain’s 10-year yield declined three basis points to 0.773%. Japan’s 10-year yield climbed two basis points to 0.003%.
West Texas Intermediate crude dipped 0.3% to $59.07 a barrel. Iron ore gained 1.6% to $92.80 per metric ton. Gold climbed 0.2% to $1,467.06 an ounce.