(Bloomberg) — European stocks retreated for a second day as dialed-down bets for Federal Reserve policy easing weighed on risk sentiment.
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The Stoxx 600 fell 0.2% after snapping its longest winning streak since 2021 in the previous session. US futures contracts were little changed after both the S&P 500 and Nasdaq 100 retreated from record highs. The dollar and Treasuries held steady.
Luxury group Richemont gained more than 6% after appointing Nicolas Bos as new chief executive officer in a management shake-up. A gauge of the biggest banks edged higher after gaining 21% so far this year.
Friday’s caution reflected a repricing of US rate cut expectations to only one reduction in 2024. Several policy makers said the Fed should keep borrowing costs higher for longer as they await more evidence inflation is easing.
“The markets are now at a bit of a crossroads,” said Stuart Cole, head macro economist at Equiti Capital. “With the central banks all very much in a data-dependence mode, the markets will be also adjusting expectations to each piece of relevant data that comes out.”
Investors will now be watching comments from Fed officials Christopher Waller and Neel Kashkari later today for further clues about the path of interest rates. European Central Bank policy makers Bostjan Vasle, Boris Vujcic, Robert Holzmann and Martins Kazaks are also set to speak.
In Asia, equities declined on further signs of economic weakness in China. The yen weakened against the dollar after news the Bank of Japan left bond buying amounts.
Commodities were broadly higher. West Texas Intermediate climbed early Friday, on pace for a third day of gains. Gold was little changed after a Thursday drop. Bitcoin traded above $65,000 after halting a decline in the prior session.
Key events this week:
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.2% as of 8:29 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index was little changed
The MSCI Emerging Markets Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was unchanged at $1.0867
The Japanese yen fell 0.2% to 155.76 per dollar
The offshore yuan was little changed at 7.2231 per dollar
The British pound was little changed at $1.2667
Cryptocurrencies
Bitcoin rose 1.6% to $66,334.95
Ether rose 3% to $3,025.88
Bonds
The yield on 10-year Treasuries was little changed at 4.38%
Germany’s 10-year yield advanced two basis points to 2.48%
Britain’s 10-year yield advanced one basis point to 4.09%
Commodities
Brent crude rose 0.5% to $83.70 a barrel
Spot gold rose 0.4% to $2,386.36 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson.
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