Stocks Drop in Quiet Holiday Trading; Pound Jumps: Markets Wrap

(Bloomberg) -- U.S. equity futures dropped alongside European stocks on Thursday in a subdued day of trading thanks to the American Thanksgiving holiday. The pound jumped and the euro strengthened after the U.K. and EU had a breakthrough over the Brexit deal.

The Stoxx Europe 600 Index gave up a chunk of Wednesday’s advance as almost every sector fell, though trading volume was 25 percent below the 30-day average and the gauge finished above its lows on the day. Asian equity benchmarks swung between gains and losses before turning higher, with Japanese stocks getting an end-of-session boost on a report about a possible government rebate. Trading volumes in the region were also depressed.

Gilts fell as a draft Brexit deal pointing to deep ties between the U.K. and European Union as well as a solution to the Irish border question was agreed at a political level. Prime Minister Theresa May spent more than two hours in Parliament Thursday responding to lawmakers’ largely skeptical questions about the deal. The region’s sovereign debt mainly edged higher.

West Texas oil traded below $54 a barrel as an increase in U.S. crude inventories added to the recent bearish mood.

Investor sentiment remains fragile following the volatility that’s rocked markets since October, wiping out many equity gains for the year. Traders are having to contend with the White House’s protectionism and President Donald Trump’s calls for the Fed to back off from raising rates, as well as corporate credit markets playing catch-up to the broader risk sell-off.

Elsewhere, Bitcoin declined, emerging-market assets edged higher and gold nudged upward. Treasuries didn’t trade because of the U.S. holiday.

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Coming Up

• It’s a shortened trading week because of the Thanksgiving holiday in the U.S. on Thursday. In addition, Black Friday, the day after Thanksgiving, marks the traditional start to the U.S. holiday shopping season.

These are the main moves in markets:

Stocks

• Futures on the S&P 500 Index decreased 0.6 percent as of 4:01 p.m. New York time, to the lowest in more than seven months.
• The Stoxx Europe 600 Index dipped 0.7 percent.
• The U.K.’s FTSE 100 Index dipped 1.3 percent, the largest decrease in six weeks.
• Germany’s DAX Index sank 0.9 percent.
• The MSCI Emerging Market Index gained 0.1 percent.

Currencies

• The Bloomberg Dollar Spot Index decreased 0.2 percent.
• The euro climbed 0.2 percent to $1.1406.
• The British pound gained 0.8 percent to $1.2879, the strongest in more than a week on the largest rise in more than a week.
• The Japanese yen gained 0.1 percent to 112.98 per dollar.

Bonds

• Germany’s 10-year yield declined one basis point to 0.37 percent.
• Britain’s 10-year yield climbed three basis points to 1.428 percent, the highest in more than a week.
• Italy’s 10-year yield fell two basis points to 3.454 percent, the lowest in more than a week.

Commodities

• West Texas Intermediate crude decreased 1.4 percent to $53.85 a barrel.
• Gold gained 0.1 percent to $1,227.38 an ounce, the highest in more than two weeks.

--With assistance from Marvin G. Perez and Andreea Papuc.

To contact the reporter on this story: Yakob Peterseil in London at ypeterseil@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, ;Christopher Anstey at canstey@bloomberg.net, Andrew Dunn

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