Stocks, Futures Steady on Dovish Powell Stance: Markets Wrap - Yahoo Finance

(Bloomberg) -- Stocks in Europe and U.S. futures were steady on Monday, bolstered by Jerome Powell’s signal that pandemic-era Federal Reserve policy support will be withdrawn cautiously and gradually.

Contracts on the S&P 500 were little changed and those on the Nasdaq 100 edged higher after a record Wall Street close in the wake of Chair Powell’s Jackson Hole speech, while the Stoxx Europe 600 index hovered close to an all-time high. Powell said the Fed may start paring bond purchases this year but is in no hurry to raise interest rates and will be guided by data on Covid-19 risks.

The dollar was steady against a basket of peers after Friday’s drop, the biggest since May. The 10-year Treasury yield held at around 1.3%, with no cash trading taking place in London as markets are closed for a public holiday. Traders are awaiting U.S. jobs data this week to assess whether the economic recovery merits an earlier tapering, after Powell gave no timeline for scaling back stimulus. Strong figures could extend the first weekly steepening of the Treasury yield curve since July.

In Asia, Japan led gains and Chinese technology stocks advanced on bargain-hunting in the beaten-down sector. The focus in China remains on Beijing’s regulatory broadside against private industries. A commentary in Chinese state-run media described President Xi Jinping’s crackdown as a “profound revolution” sweeping the country and warned that anyone who resisted would face punishment.

Central banks are seeking to reduce monetary policy support in part to keep a lid on inflation, while at the same time nurturing economic recoveries facing challenges from the delta virus strain. Global shares are at all-time highs, suggesting markets expect officials can achieve this delicate balancing act.

“There is little doubt Powell was dovish, relative to market pricing and positioning,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a note. Weston remains “positive on risk for now” but added a slowing global economy allied with Fed policy normalization remains a threat.

Commodity markets are focused on Hurricane Ida. U.S. gasoline futures jumped after the storm barreled ashore in Louisiana, disrupting energy supplies. Oil edged lower as it appeared local rigs may have escaped significant damage and the OPEC+ producers’ cartel is expected to endorse a supply increase. Elsewhere, gold pared gains and Bitcoin fluctuated around $48,000.

Here are some key events to watch this week:

The U.S. plans to pull out almost all American troops from Afghanistan TuesdayOPEC+ meeting on output WednesdayEuro zone manufacturing PMI WednesdayChina Caixin manufacturing PMI WednesdayU.S. jobs report Friday

For more market analysis read our MLIV blog.

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.1% as of 9:43 a.m. London timeFutures on the S&P 500 were little changedFutures on the Nasdaq 100 rose 0.1%Futures on the Dow Jones Industrial Average were little changedThe MSCI Asia Pacific Index rose 1%The MSCI Emerging Markets Index rose 1%

Currencies

The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1798The Japanese yen was little changed at 109.85 per dollarThe offshore yuan was little changed at 6.4644 per dollarThe British pound was little changed at $1.3761

Bonds

The yield on 10-year Treasuries declined one basis point to 1.30%Germany’s 10-year yield was little changed at -0.42%Britain’s 10-year yield declined two basis points to 0.58%

Commodities

Brent crude fell 0.7% to $72.20 a barrelSpot gold fell 0.1% to $1,814.98 an ounce

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2021-08-30 07:30:42Z
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