(Bloomberg) -- European stocks slipped with S&P 500 Index futures as investors awaited a possible Federal Reserve interest-rate cut and some of the season’s biggest corporate earnings, including from Apple and Facebook. Treasuries and German bunds edged higher.
The Stoxx Europe 600 Index declined after six straight sessions of gains, led lower by telecoms. Contracts on the S&P 500 drifted lower, a day after the U.S. equity benchmark hit a record. Japan’s Topix benchmark closed at a 2019 high, while trading elsewhere in Asia was mixed, with equities dropping in Hong Kong and Shanghai, where a warning against speculation on blockchain-related stocks depressed trading.
Yields on Japanese 10-year bonds hit the highest since June and their Australian counterparts jumped almost nine basis points, while peers in the U.S. and Germany halted a surge that’s lasted several days.
Investors are struggling to find fresh impetus to extend the record-breaking rally in U.S. stocks. Optimism on the China trade front from President Donald Trump is aiding the bull case, and an anticipated Fed rate cut on Wednesday may add further fuel. Still, recent data has come in mixed and while corporate earnings are topping estimates on average, the bar has been set low.
“What we’ve had happening in markets in the last few weeks is a lifting of that perceived uncertainty” about U.S.-China trade and Brexit, with central bank easing providing a lift, Sue Trinh, a global macro strategist at Manulife Investment Management, told Bloomberg TV. “The real risk is that we’re seeing a boost to asset prices but no real uptick in the real economy,” she said.
Meanwhile, the pound weakened as U.K. Prime Minister Boris Johnson said he’ll keep pushing for an early election despite failing for a third time to trigger a snap poll. In metals, spot palladium slipped after a record close Monday.
Here are some key events coming up this week:
Earnings include: Pfizer on Tuesday; Airbus, Apple, Credit Suisse, Facebook and PetroChina on Wednesday; Mitsubishi Heavy on Thursday; Exxon Mobil and Macquarie Group on Friday.The Fed is expected to lower the main interest rate when policy makers decide on Wednesday. U.S. economic growth is forecast to have slowed to 1.6% in the third quarter. GDP data are due Wednesday. The Fed’s preferred inflation metric, the core PCE deflator, is due Thursday.The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference.Friday brings the monthly U.S. non-farm payrolls report.
These are some of the main moves in markets:
Stocks
The Stoxx Europe 600 Index sank 0.5% as of 9:29 a.m. London time.Futures on the S&P 500 Index fell 0.1%.Japan’s Topix index climbed 0.9%.The MSCI Asia Pacific Index climbed 0.5%.
Currencies
The Bloomberg Dollar Spot Index gained 0.1%.The pound weakened 0.2% to 86.484 pence per euro.The euro decreased 0.2% to $1.108.The South Korean Won strengthened 0.6% to 1,163.19 per dollar.
Bonds
The yield on 10-year Treasuries declined one basis point to 1.83%.Britain’s 10-year yield decreased three basis points to 0.689%.Germany’s 10-year yield fell two basis points to -0.35%.Australia’s 10-year yield jumped nine basis points to 1.1855%.
Commodities
The Bloomberg Commodity Index was little changed.Gold rose 0.1% to $1,493.89 an ounce.West Texas Intermediate crude decreased 0.8% to $55.34 a barrel.
--With assistance from Andreea Papuc, Tian Chen and Livia Yap.
To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, ;Samuel Potter at spotter33@bloomberg.net, Yakob Peterseil
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.
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