Stocks Hover Near Highs as Traders Await US Data: Markets Wrap

(Bloomberg) — Global stocks hovered near all-time highs as traders prepared for data releases that will offer insight about the health of the US economy and the Federal Reserve’s interest-rate path.

Most Read from Bloomberg

Europe’s Stoxx 600 index traded a whisker below its record of last week. US contracts were little changed ahead of Wall Street’s reopening following the Labor Day holiday, while a gauge of Asian stocks was flat.

In what is historically a poor month for stocks, traders are bracing for fresh bouts of volatility. In the runup to the start of the Fed’s rate-cutting cycle, investors are wary of risks stemming from US election campaigning and rising geopolitical tensions.

The publication of US manufacturing data later Tuesday will mark the start of a busy week of economic reports, culminating with nonfarm payrolls statistics on Friday. A similar series of releases in August induced fears that the US economy was heading for a hard landing, whiplashing markets.

“We do expect higher volatility over coming weeks,” Mohit Kumar, chief economist for Europe at Jefferies International, said in a note to clients. Central banks “are data dependent and markets expectations of their response function is likely to whipsaw around data releases.”

Markets are currently pricing a start to US policy easing this month, with a roughly one-in-five chance of a 50 basis-point cut, according to data compiled by Bloomberg.

In currencies, the yen rallied after Bank of Japan Governor Kazuo Ueda reiterated that the central bank will continue to raise interest rates if the economy and prices perform as expected. The dollar was unchanged after modest gains over the previous two trading days.

Oil edged higher after Libya declared force majeure at a key oil field amid widening shutdowns that have wiped out close to a million barrels from daily global supplies.

Key events this week:

Switzerland GDP, CPI, Tuesday
US construction spending, ISM Manufacturing index, Tuesday
Australia GDP, Wednesday
China Caixin services PMI, Wednesday
Euro-zone HCOB services PMI, PPI, Wednesday
Fed’s Beige Book, Wednesday
Eurozone retail sales, Thursday
Germany factory orders, Thursday
US initial jobless claims, ADP employment, ISM services index, Thursday
Euro-zone GDP, Friday
US nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 was little changed 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 fell 0.1%
The MSCI Asia Pacific Index was little changed
The MSCI Emerging Markets Index fell 0.3%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1066
The Japanese yen rose 0.5% to 146.20 per dollar
The offshore yuan was little changed at 7.1191 per dollar
The British pound was little changed at $1.3135

Cryptocurrencies

Bitcoin was little changed at $58,956.13
Ether fell 1.5% to $2,517.42

Bonds

The yield on 10-year Treasuries was little changed at 3.91%
Germany’s 10-year yield declined two basis points to 2.32%
Britain’s 10-year yield declined one basis point to 4.04%

Commodities

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson.

(An earlier version corrected the date that Chinese factory data came out.)