European stocks drifted with U.S. equity futures and Asian shares slipped as markets largely entered a holding pattern ahead of the Federal Reserve rate decision. The dollar rose, Treasuries were steady and emerging-market currencies extended a drop.
The Stoxx Europe 600 Index opened in the green as miners and tech companies led a broad advance, but the gains were modest and the gauge pared to trade little changed. Japanese shares rose as the yen dipped, while equities fell in Hong Kong and Australia. Chinese shares also retreated, with ZTE Corp. plunging by its daily limit after it agreed to a $1 billion fine. The pound dropped as Brexit battles rumbled on. Gold slipped a second day.
As far as the markets are concerned the Fed is all but certain to raise rates by a quarter-point at the close of a two-day meeting Wednesday, so the focus will be on the outlook for future policy. An uptick in inflation has reignited some speculation there could be a total of four hikes in 2018. Meanwhile the European Central Bank will decide rates on Thursday -- no change is expected but investors will be braced for news on a potential end to the region’s quantitative-easing program.
Elsewhere, the Philippine peso led declines in Asian emerging currencies as the nation’s stocks plunged more than 2.5 percent. Turkey’s lira also fell as polls pointed to a close-run election. West Texas crude dropped after an industry report showed U.S. stockpiles expanded.
These are some key events to watch this week:
And these are the main moves in markets:
Stocks
The Stoxx Europe 600 Index increased less than 0.05 percent as of 9:24 a.m. London time. Futures on the S&P 500 Index gained 0.1 percent, reaching the highest in more than three months on its ninth consecutive advance. The U.K.’s FTSE 100 Index fell 0.1 percent. Germany’s DAX Index decreased 0.2 percent. The MSCI Emerging Market Index sank 0.6 percent to the lowest in more than a week. The MSCI Asia Pacific Index sank 0.4 percent to the lowest in more than a week.
Currencies
The Bloomberg Dollar Spot Index gained 0.2 percent to the highest in seven months. The euro dipped 0.1 percent to $1.1738, the weakest in more than a week. The British pound fell 0.3 percent to $1.3332, the weakest in more than a week on the largest drop in more than two weeks. The Japanese yen fell 0.3 percent to 110.70 per dollar, the weakest in more than three weeks. The Turkish lira sank 1.2 percent to 4.6521 per dollar, the weakest in almost three weeks.
Bonds
The yield on 10-year Treasuries dipped one basis point to 2.96 percent. Germany’s 10-year yield fell two basis points to 0.47 percent. Britain’s 10-year yield declined one basis point to 1.401 percent, the lowest in a week on the biggest fall in almost two weeks. Italy’s 10-year yield decreased seven basis points to 2.795 percent, the lowest in more than a week.
Commodities
West Texas Intermediate crude declined 0.2 percent to $66.21 a barrel. Gold dipped 0.2 percent to $1,293.25 an ounce, the weakest in more than a week. Brent crude fell 0.4 percent to $75.56 a barrel, the lowest in a week.
--With assistance from Andreea Papuc
Bloomberg