Europe Stocks Slip, Euro Gains Before ECB Meeting: Markets Wrap

Europe Stocks Slip, Euro Gains Before ECB Meeting: Markets Wrap

(Bloomberg) — Stocks slipped and the euro steadied as investors waited for the outcome of the European Central Bank meeting. Treasuries gained, while crude oil declined.

While the central bank is widely expected to keep policy steady, investors will be closely watching comments from ECB President Christine Lagarde for any hints on whether the stronger euro is becoming a problem for the region. The FTSE 100 Index led losses among European equities amid fears that Brexit talks are falling apart. U.S. futures indicated the S&P 500 will slide after yesterday’s rally.



a screenshot of a cell phone: Nasdaq 100 volatility shows tech selloff may be over


© Bloomberg
Nasdaq 100 volatility shows tech selloff may be over

The ECB later today is expected to release new economic projections that show the recovery is still highly uncertain, although some of the worst downside risks haven’t materialized. The projections for output and inflation will show only slight changes to the June outlook, according to euro-area officials familiar with the discussions.

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ECB Confronts Weaker Economy, Stronger Euro: Decision Day Guide

After a volatile few days that whipsawed the biggest U.S. technology stocks, markets seem to be taking a breather on Thursday. Yesterday, the S&P 500 rose the most since June overnight and the Nasdaq rebounded following an 11% rout that took the gauge down to its 50-day moving average, a closely-watched technical level.

“We are in a recovery but this recovery is about to slow down,” David Kelly, chief global strategist at JPMorgan Asset Management, said on Bloomberg TV. “It’s important for investors at this stage to be disciplined and realize that just because we’ve seen some good economic numbers and because the market seems to be OK here, don’t take your eye off the ball.”

Elsewhere in markets, the MSCI AC Asia Pacific Index gained, with shares rising in Japan, South Korea and Australia. Indonesian equities slumped after officials said the capital, Jakarta, will bring back social distancing measures due to a spike in Covid-19 cases.

Here are some key events coming up:

The ECB is expected to hold rates steady on Thursday but indicate that downside risks have intensified, suggesting further easing is possible before year-end.The U.S. releases initial jobless claims numbers Thursday.U.S. CPI data is due Friday, with consumer prices expected to have risen in August.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index increased 0.2% as of 9:16 a.m. London time.The Stoxx Europe 600 Index climbed 0.1%.The MSCI Asia Pacific Index advanced 0.8%.The MSCI Emerging Market Index gained 0.5%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro advanced 0.2% to $1.1824.The British pound was unchanged at $1.3.The offshore yuan weakened 0.1% to 6.8417 per dollar.

Bonds

The yield on 10-year Treasuries fell one basis point to 0.68%.The yield on two-year Treasuries decreased less than one basis point to 0.14%.Germany’s 10-year yield declined less than one basis point to -0.47%.Britain’s 10-year yield sank one basis point to 0.214%.Japan’s 10-year yield dipped less than one basis point to 0.028%.

Commodities

West Texas Intermediate crude gained 0.2% to $37.54 a barrel.Brent crude climbed 0.1% to $40.34 a barrel.Gold weakened 0.2% to $1,943.71 an ounce.

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