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Dollar extends gains; stocks, futures fluctuate: markets wrap

Crude oil dipped and Treasuries were steady.
Image: Andrew Harrer/Bloomberg

The dollar rebound extended Wednesday as it pushed past key technical resistance. Asian stocks fluctuated with US futures as investors mulled remarks from Federal Reserve officials that pointed to a slow economic recovery.

Shares swung in Japan as traders returned from a holiday, while South Korean and Hong Kong equities ticked higher. Nasdaq futures dipped after disappointment from Tesla Inc. and S&P 500 contracts fluctuated. Australian stocks climbed, while the Australian dollar slipped with bond yields after a prominent economist projected the central bank will reduce interest rates next month. European futures pointed higher. The offshore yuan retreated following a weaker-than-anticipated daily currency fixing.

US shares reversed earlier losses Tuesday which came after Fed Chairman Jerome Powell said the economy has a long way to go before fully recovering and will need further support. Meanwhile, Chicago Fed President Charles Evans noted that rates could rise before the inflation target is reached. Crude oil dipped and Treasuries were steady.

Global stocks are on track for their first monthly drop since March on the lack of another US fiscal stimulus package and an increase in global virus cases that has raised the specter of more lockdowns. British Prime Minister Boris Johnson announced new restrictions that are likely to last six months and told people to work from home if possible, saying the country is at a “perilous turning point” for the virus.

“This is a massive roller coaster and you just have to hold your stomach,” Erin Gibbs, president and chief executive officer of Gibbs Wealth Management, said on Bloomberg TV. “We are most likely to see this continued high volatility” until the US election in November, she said.

Elsewhere, gold slipped below $1,900 an ounce.

These are some events to watch this week:

  • Powell appears before the House Select Subcommittee on the coronavirus to discuss the central bank’s response on Wednesday.
  • US initial jobless claims are due Thursday.

These are some of the main moves in markets:

Stocks

  • Futures on the S&P 500 rose 0.3% as of 6:55 a.m. in London. The gauge advanced 1.1% on Tuesday.
  • Topix index was little changed.
  • Hong Kong’s Hang Seng rose 0.2%.
  • Shanghai Composite rose 0.3%.
  • Australia’s S&P/ASX 200 Index gained 2.4%.
  • South Korea’s Kospi index rose 0.3%.
  • Euro Stoxx 50 futures rose 0.7%.

Currencies

  • The yen fell 0.1% to 105.08 per dollar.
  • The Bloomberg Dollar Spot Index climbed 0.2%.
  • The euro bought $1.1679, down 0.3%.
  • The offshore yuan lost 0.2% to 6.7962 per dollar.
  • The Aussie fell 0.6% to 71.25 US cents.

Bonds

  • The yield on 10-year Treasuries held at 0.67%.
  • Australia’s 10-year bond yield fell about four basis points to 0.79%.

Commodities

  • West Texas Intermediate crude fell 0.9% to $39.45 a barrel.
  • Gold was at $1,887.18 an ounce, down 0.7%.
© 2020 Bloomberg

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