Dollar Steady, Oil Rises as European Stocks Falter: Markets Wrap

(Bloomberg) -- European shares failed to carry forward a rally from Asia, while U.S. stock futures also headed lower as the surge that handed the S&P 500 Index its best week in five years appeared to fade. The dollar was steady and oil climbed.

The Stoxx Europe 600 index fell for the first time in four days as auto and consumer stocks dropped. That contrasted with Asia, where equities built on their best week since September 2016, spurred by a jump in Japanese stocks after the yen weakened. German bunds retreated with most European bonds and the euro fluctuated.

European markets were the center of investor attention on Monday as U.S. stocks and Treasuries take a break for Presidents’ Day holiday and markets in Hong Kong and China remain closed for the Lunar New Year. The continent’s equity gauge has trailed its American counterpart since a global selloff earlier this month, partly thanks to a jump in the euro.

As the week rolls on the U.S. Treasury will open the borrowing floodgates, and it’ll be up to bond traders to signal how much that extra supply will cost American taxpayers. The Treasury will pack in auctions totaling $258 billion this week, including record-sized sales of three- and six-month bills. With little in the way of significant economic data on the schedule, the sales will provide the clearest gauge yet of how steeply borrowing costs may rise.

In Asia, currency traders saw the yen retreat from a 15-month high even as data showed Japan’s exports and imports grew strongly in January from a year earlier in a sign the economy continues to expand.

Terminal users can read more in our markets blog.

Here are some key events scheduled for this week:

• The Reserve Bank of Australia releases minutes of its February meeting Tuesday.
• The U.S. Treasury plans to sell $151 billion of debt in three auctions on Tuesday that will result in the heaviest day of T-bill supply on record, according to Bloomberg data going back to 1994. 
• The Federal Reserve will release minutes on Wednesday of its Jan. 30-31 meeting, Janet Yellen’s last as chair, where officials kept the rate unchanged.
• Fed policy makers speaking this week include New York Fed President William Dudley and Atlanta Fed President Raphael Bostic. Cleveland Fed President Loretta Mester is among speakers at the U.S. Monetary Policy Forum in New York City. 
• Companies announcing earnings this week include: Walmart, Home Depot, HSBC, BHP Billiton, Glencore, Barclays.

These are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index dipped 0.6 percent.
• The MSCI World Index of developed countries declined 0.1 percent, the first retreat in more than a week.
• The MSCI Asia Pacific Index climbed 0.8 percent, hitting the highest in two weeks with its sixth straight advance.
• Japan’s Nikkei 225 Stock Average surged 2 percent to the highest in two weeks.
• The MSCI Emerging Market Index climbed 0.2 percent as of 3:06 p.m. New York time.
• The U.K.’s FTSE 100 Index fell 0.6 percent, the biggest fall in more than a week.
• Futures on the S&P 500 Index fell 0.2 percent, the first retreat in more than a week.
• Argentina’s Merval Index rose 1.9%, its fourth straight gain.

Currencies

• The Bloomberg Dollar Spot Index climbed 0.1 percent.
• The euro declined less than 0.05 percent to $1.2408.
• The British pound decreased 0.1 percent to $1.4009.
• The Japanese yen sank 0.3 percent to 106.56 per dollar, the largest decrease in almost two weeks.

Bonds

• Britain’s 10-year yield gained two basis points to 1.601 percent.
• Germany’s 10-year yield increased three basis points to 0.73 percent, the largest increase in more than a week.

Commodities

• West Texas Intermediate crude climbed 1.3 percent to $62.5 a barrel, the highest in almost two weeks.
• Gold gained less than 0.05 percent to $1,346.36 an ounce.

--With assistance from Andreea Papuc and Sebastian Boyd

To contact the reporter on this story: Samuel Potter in London at spotter33@bloomberg.net.

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

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