Stocks Mixed, Bonds Edge Up as Busy Week Kicks Off: Markets Wrap

(Bloomberg) — European stocks edged down with U.S. equity futures and most Asian shares rose as investors looked ahead to a week brimming with potential catalysts, from central bank meetings to a looming America-China tariff deadline. Treasuries nudged higher along with European bonds.

The Stoxx Europe 600 Index fluctuated before drifting lower, with declines in technology shares offsetting gains in retailers. Contracts on the main U.S. equity gauges struggled for traction as traders awaited news on whether Washington will go ahead with a planned Dec. 15 tariff hike on Chinese imports. Stock indexes posted modest increases in Tokyo and Seoul, while gains mostly fizzled in Hong Kong and Shanghai. The pound strengthened as polls showed the U.K. Conservative Party on course to win a majority in Thursday’s election, which would likely mean Britain leaving the European Union by Jan. 31.

With the U.S. and China heading into the final stretch of negotiations to ward off an escalation in tariffs, markets will be watching closely for any signs of progress. White House economic adviser Larry Kudlow said Friday the two sides are haggling over the amount of U.S. farm products Beijing is willing to purchase. Data showed China’s exports fell 1.1% in November, with those to the U.S. tumbling 23%, underscoring why the nation may want to resolve the dispute.

“There’s no upside risks on the horizon,” Katrina Ell, an economist at Moody’s Analytics, said on Bloomberg TV. “It is weighted to the downside and that big downside risk is coming from the trade war.”

Also in focus for investors this week will be central banks, with policy meetings at the Federal Reserve and the European Central Bank that may offer clues on whether more monetary easing is in store in 2020.

Elsewhere, oil trimmed a rally spurred by Saudi Arabia promising significant additional production cuts beyond what was agreed with fellow OPEC+ members.

Here are some key events to watch this week:

• The Federal Reserve decides on interest rates on Wednesday, followed by a press briefing from Chairman Jerome Powell.
• China reports on inflation Tuesday, and data on credit growth is due at some point in the coming week
• The next European Central Bank policy decision is on Thursday.
• The U.K. holds a general election Thursday.

These are some of the main moves in markets:

Stocks

• Futures on the Index decreased 0.1% as of 8:12 a.m. London time.
• The Index dipped 0.2%.
• The MSCI Asia Pacific Index advanced 0.4%.
• The MSCI Emerging Market Index gained 0.3%.

Currencies

• The Bloomberg Dollar Spot Index was little changed.
• The advanced 0.1% to $1.1067.
• The rose 0.2% to $1.316.
• The declined 0.1% to 7.039 per dollar.
• The Japanese was little changed at 108.53 per dollar.

Bonds

• The yield on Treasuries declined one basis point to 1.82%.
• The yield on Treasuries dipped one basis point to 1.61%.
• Germany’s yield fell two basis points to -0.30%.
• Britain’s yield sank two basis points to 0.749%.
• Japan’s yield climbed less than one basis point to -0.002%.

Commodities

• fell 0.6% to $58.87 a barrel.
• Iron ore gained 5.8% to $92.30 per metric ton.
• climbed 0.2% to $1,462.78 an ounce.

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