European Equities Reverse Gains, Brought Lower by Travel Sector and Commodities
Markets were mixed on Thursday, while US futures dropped. Investors were mulling over the prospect of reduced stimulus against signs of economic progress. Contracts on key US benchmarks sank. The S&P 500 Index carried its losses over to the fourth day. Oil prices receded. Treasuries advanced. European equities reversed their earlier gains. Although defensive shares jumped, their upward movement was reined in by commodities and the travel sector. Asian markets remained largely unchanged on Thursday.
Oil arrested its earlier upward movement and extended a three-week low. Oil prices retreated after Iran’s president announced that the broad outline of a deal to end the US’s sanctions on Iran’s oil exports had been agreed upon. When the greenback slid, yields on 10-year Treasuries followed suit. Cryptocurrencies traded on a firmer ground on Thursday. Bitcoin recovered from yesterday’s fluctuations and traded higher.
In general, stocks have been volatile since they reached record highs in May. Commodities, too, slid from multi-year peaks. Minutes from the Federal Reserve’s last meeting showed that some officials would consider discussing the reduction of bond purchases in the future, provided the American economy continued recovering at a fast pace.
Copper reversed its earlier losses suffered on Wednesday and moved higher. A belief in growing demand pushed the red metal up. Iron ore futures dipped.
These are the main moves in the markets that traders should watch on Thursday:
S&P 500 futures decreased 0.5% in the morning according to New York time. Nasdaq futures gave up 0.4%. Futures on the Dow Jones Industrial Average lost 0.5%. The Stoxx Europe 600 gained 0.3%. The FTSE advanced 0.21%. The DAX in Germany rose 0.55%. The French CAC jumped 0.61%. The MSCI World Index remained unchanged on Thursday. The Nikkei in Japan edged 0.19% higher. The Topix inched 0.04% up. The Hang Seng dipped 0.50%. The S&P/ASX 200 increased 1.27%.
The USD Spot Index edged 0.1% lower. The euro was little changed trading at $1.2187. The British pound, too, remained unchanged on Thursday, trading at $1.4122. The Japanese yen added 0.2% to 108.95 per dollar. The AUD/USD pair advanced 0.34% to trade at $0.7754. USD/CHF changed hands at $0.9007, down 0.39%. USD/CAD retreated 0.19% to trade at $1.2110.
West Texas Intermediate crude lost 1.5% to $62 a barrel. Gold futures gave up 0.8% to trade at $1,867 an ounce.
The yield on 10-year Treasuries decreased one basis point to 1.66%. Germany’s 10-year yield grew one basis point to -0.10%. Britain’s 10-year yield gained one basis point to 0.86%.
Traders should watch these events this week:
- IMF Managing Director Kristalina Georgieva and ECB President Christine Lagarde speak at the Vienna Economic Dialogue on Thursday
- Euro-area finance ministers and central bank chiefs hold an informal meeting. A larger group of EU finance ministers and central bank chiefs will meet on May 22.
Have a successful trading day!