U.S. Stock Futures Advance; Pound Drops on Brexit: Markets Wrap

(Bloomberg) -- U.S. equity futures climbed on Monday and stocks closed steady in Europe. Emerging markets were lower, with Argentina slumping the most, while investors assessed the complex outlook for international trade. The pound weakened as the U.K.’s flagship Brexit proposal came under attack at home and in Brussels.

U.S. equity futures are closed until 6 p.m. New York time.

Gains in insurers were largely offset by declines in automakers and real estate firms in thin trading on the Stoxx Europe 600 Index, following a downbeat session in Asia. Euro-area manufacturers saw the slowest order growth in two years after worries over trade hit confidence. A Bloomberg gauge of the dollar edged higher. The FTSE 100 index close up 1 percent.

Italy’s bonds extended gains after its deputy finance minister toned down rhetoric on the budget plan. Argentina’s peso tumbled as the country announced taxes on exporters to boost revenue.

Argentina and Turkey are proving the latest epicenters for crises that are denting sentiment across emerging economies, which have underperformed developed markets after a stronger dollar and tighter trade policies sent shock waves from China to Brazil. U.S. stocks remain a point of light, reaching record highs last month even as the Federal Reserve prepares to raise interest rates again later in September.

“My view is to continue trading on the trends -- staying bearish on emerging markets,” Chris Weston, head of research at Pepperstone Financial Pty Ltd., told Bloomberg TV from Melbourne. “We need to see a perception of the U.S. dollar going lower and clarity that the trade tensions are coming to some sort of a close. I don’t think we’re there yet.” Turkey’s central bank signaled higher interest rates are in the offing after inflation jumped, though it only briefly pared the currency’s drop.

Elsewhere, copper extended week’s losses and oil climbed. Futures on the Dow, S&P and Nasdaq were higher, with exchanges closed on Monday for the Labor Day holiday.
Terminal users can read more in our Bloomberg Markets Live blog here.

Here are some key events coming up this week:

• Bank of England governor Mark Carney on Tuesday testifies on the August inflation report and policy decision.
• Executives from Facebook, Twitter and Google on Wednesday testify on social media, Russia meddling.
• U.S. PMI data are due Tuesday, and employment reports for August are set to follow Friday.

These are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index closed up 0.1 percent in London.
• Futures on the S&P 500 Index gained 0.2 percent.
• The MSCI All-Country World Index dipped 0.2 percent to the lowest in more than a week.
• The MSCI Emerging Market Index fell 0.9 percent to the lowest in almost two weeks.

Currencies

• The Bloomberg Dollar Spot Index increased 0.1 percent to the highest in more than a week.
• The euro advanced 0.2 percent to $1.1622, the biggest gain in a week.
• The Japanese yen decreased less than 0.03 percent to 111.06 per dollar.
• The Turkish lira declined 1.6 percent to 6.6403 per dollar.
• South Africa’s rand sank 1 percent to 14.8427 per dollar, the weakest in more than two years.
• The MSCI Emerging Markets Currency Index declined 0.2 percent to the lowest in more than two weeks.

Bonds

• Britain’s 10-year yield dipped two basis points to 1.404 percent.
• Germany’s 10-year yield climbed one basis point to 0.33 percent.

Commodities

• The Bloomberg Commodity Index increased 0.1 percent.
• West Texas Intermediate crude advanced 0.4 percent to $70.10 a barrel.
• LME copper decreased 0.1 percent to $5,967.50 per metric ton, the lowest in more than two weeks.
• Gold declined 0.2 percent to $1,201.36 an ounce.

--With assistance from Hans Lee, Thomas Seal and Adam Haigh.

To contact the reporter on this story: Eddie van der Walt in London at evanderwalt@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Todd White, Christiana Sciaudone

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