Stocks Fluctuate Before Fed Speakers; Euro Falls: Markets Wrap

(Bloomberg) — Stocks fluctuated as traders looked forward to speeches from Federal Reserve officials for fresh insight on the pace and scope of easing.

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Europe’s Stoxx 600 benchmark and US stock futures traded little changed. The euro retreated and German bond yields fell after a lower-than-expected French services PMI reading. In Asia, stock benchmarks climbed after China announced plans for a rare economic briefing Tuesday and cut a short-term policy rate.

After last week’s jumbo rate cut in the US, investors are awaiting comments from Fed speakers including regional presidents Raphael Bostic and Austan Goolsbee on Monday. In China, any signs that stimulus is on the way could bolster markets more broadly after disappointing data raised concern the country will miss its annual expansion target.

“The start of the Fed easing cycle should lead to more stimulus from China, particularly as the 5% growth target seems difficult to achieve,” Mohit Kumar, chief strategist and economist for Europe at Jefferies International Ltd., wrote in a note. The “stimulus measures should also be beneficial for Europe.”

The French economy experienced a sharp post-Olympics slowdown in September, with the Composite PMI dropping to 47.4 from August’s 53.1, data on Monday showed. Political turmoil, triggered by President Emmanuel Macron’s reshuffled government, has undermined investor confidence. Prime Minister Michel Barnier said his new government could increase taxes for big business and the wealthiest as it seeks to repair runaway budget deficits.

In Germany, Olaf Scholz’s Social Democrats held off the far-right Alternative for Germany and looked set to cling on to power in the eastern state of Brandenburg.

UK Chancellor of the Exchequer Rachel Reeves, meanwhile, is expected to give a more “positive, optimistic message” about the future of the economy at the Labour Party’s annual conference, Environment Secretary Steve Reed told Bloomberg Radio. This comes after the government was criticized for dragging down confidence with gloomy warnings about the October budget.

Elsewhere this week, the central banks of Sweden and Switzerland are scheduled to hold monetary policy decisions. On Friday, traders will be watching for the Fed’s preferred price metric and data on US personal spending and income for further clues on the strength of the economy after last week’s 50 basis-point rate cut.

Gold touched a record high as the worsening strife in the Middle East fueled wagers on further price gains in the metal due to its haven status.

Key events this week:

Eurozone HCOB Manufacturing PMI, HCOB Services PMI, Monday
UK S&P Global Manufacturing PMI, S&P Global Services PMI, Monday
Australia rate decision, Tuesday
Japan Jibun Bank Manufacturing PMI, Services PMI, Tuesday
Mexico CPI, Tuesday
Bank of Canada Governor Tiff Macklem speaks, Tuesday
Australia CPI, Wednesday
China medium-term lending facility rate, Wednesday
Sweden rate decision, Wednesday
Switzerland rate decision, Thursday
ECB President Christine Lagarde speaks, Thursday
US jobless claims, durable goods, revised GDP, Thursday
Fed Chair Jerome Powell gives pre-recorded remarks to the 10th annual US Treasury Market Conference, Thursday
Mexico rate decision, Thursday
Japan Tokyo CPI, Friday
China industrial profits, Friday
Eurozone consumer confidence, Friday
US PCE, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.1% as of 8:42 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 rose 0.2%
The MSCI Emerging Markets Index rose 0.1%

Currencies

The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.5% to $1.1110
The Japanese yen rose 0.2% to 143.60 per dollar
The offshore yuan fell 0.3% to 7.0610 per dollar
The British pound fell 0.4% to $1.3270

Cryptocurrencies

Bitcoin rose 0.5% to $63,515.51
Ether rose 2.6% to $2,641.58

Bonds

The yield on 10-year Treasuries was little changed at 3.74%
Germany’s 10-year yield declined four basis points to 2.16%
Britain’s 10-year yield declined two basis points to 3.88%

Commodities

Brent crude rose 0.1% to $74.59 a barrel
Spot gold fell 0.2% to $2,615.41 an ounce

This story was produced with the assistance of Bloomberg Automation.