BLBG: Europe Stocks, Oil Rise as Bonds Steady Before Fed: Markets Wrap
Crude prices were once again a dominant story in markets, with oilâ€™s rebound helping underpin European stocks as investors wait for Wednesdayâ€™s expected U.S. interest rate increase. The British pound pared a rebound and metals climbed.
West Texas Intermediate oil jumped above $48 a barrel after an industry report pointed to falling crude stockpiles in the U.S. A broader recovery of commodities spurred the Stoxx Europe 600 Index higher, with miners driving many of the gains. The pound trimmed an advance after data showing wage growth slowed, while the dollar slipped against most of its major peers.
The swings in oil added some drama to financial markets that have entered a two-day period brimming with central bank decisions, European political drama and a raft of economic data. With the Federal Reserve seen as all but certain to raise rates, investors have been weighing how precarious energy prices will feed into the central bankâ€™s path for future moves.
â€śIf youâ€™re excited about whether Fed Chair Janet Yellen will say anything about the number of hikes this year, I think you will be disappointed,â€ť Henrik Drusebjerg, chief strategist at Carnegie Investment Bank AB said in an interview with Bloomberg Radioâ€™s Nejra Cehic and Markus Karlsson. â€śThe Fed has come to use a new term that they will use the window when they have it. If the economy is strong, they will continue hiking.â€ť
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What investors will be watching:
The Fedâ€™s decision will be announced at 2 p.m. in Washington, followed by Yellenâ€™s news conference a half hour later. Investors are focused on any hints of a change in the number of increases the central bank foresees this year.
Wednesdayâ€™s vote in the Netherlands will deliver a reading on the state of populism in Europe as races in France and Germany heat up.
The Bank of Japan is set to keep its rates and yield-curve policy unchanged in its policy decision on Thursday. The Bank of England, Swiss National Bank and Bank Indonesia are also expected to stand pat with policy decisions.
U.S. Secretary of State Rex Tillerson travels to Japan, South Korea and China in his first visit to the region since taking office.
U.S. President Donald Trumpâ€™s first budget outline for fiscal 2018 is expected on Thursday. Heâ€™s said heâ€™ll seek a $54 billion boost in defense spending, paid for by an equal amount of cuts to non-defense agencies.
Here are the main market moves:
Stocks in Asia were mixed. Hong Kong shares pared declines as Chinese Premier Li Keqiang played down the risk of a trade conflict. Speaking at a press conference after the close of the annual National Peopleâ€™s Congress, Li said itâ€™s important for both China and the U.S. to keep talking to build trust.
WTI gained 2.1 percent to $48.73 as of 7:25 a.m. in New York. U.S. inventories fell by 531,000 barrels last week, the industry-funded American Petroleum Institute was said to report.
Gold climbed 0.2 percent to $1,201.98 an ounce after falling 0.4 percent Tuesday.
Iron ore jumped 3.4 percent, adding to a 4.3 percent advance in the previous session.
The Bloomberg Dollar Spot Index slipped by 0.2 percent.
The British pound pared gains after wage growth slowed. A YouGov poll for The Times showed that 57 percent of Scottish voters want to remain inside the U.K. compared to 43 percent who seek independence. It traded 0.3 percent higher after jumping as much as 0.9 percent earlier.
The euro rose by 0.2 percent to $1.0624, following its 0.5 percent drop a day earlier.
The Stoxx Europe 600 Index added 0.2 percent as mining companies rallied 1.8 percent as a group.
Futures on the S&P 500 gained 0.2 percent. The benchmark index slipped 0.3 percent on Tuesday.
The yield on 10-year Treasury notes fell two basis points to 2.58, after slipping three basis points in Tuesday trading.