US futures, Europe stocks pause as dollar drops: markets wrap

US stock futures edged lower on Friday, European shares were steady and Asia equities rose at the end of a week when sentiment was bolstered by a more dovish tone from the Federal Reserve and hopes for a breakthrough on trade. The dollar slipped and Treasuries ticked higher.

Contracts on the Dow, S&P and Nasdaq indexes all pointed to a soft open in New York, while the Stoxx Europe 600 Index battled to hold on to an early gain. In Asia, shares rose in Shanghai, Tokyo, Seoul and Hong Kong. The greenback was set for a fourth week of losses after Fed Chairman Jerome Powell underscored the message of patience with further interest-rate hikes, while saying the central bank will keep shrinking its balance sheet. European debt tracked Treasuries higher. The pound drifted as UK politicians continued to debate Prime Minister Theresa May’s Brexit deal.

Equities are set for big gains this week amid signs of progress between the world’s two biggest economies on trade and dovish commentary from the Fed. Still, worries remain about economic growth and earnings prospects, while there’s also uncertainty as the US partial government shutdown threatens to extend into a fourth week.

Chinese Vice Premier Liu He is set to visit Washington on January 30 and 31 for further trade talks and China’s yuan, which slumped last year as trade tensions worsened, is heading for its best week since 2005 back when the country dropped a fixed peg to the dollar.

Elsewhere, oil in New York traded around $53 a barrel after surging this week. Emerging-market currencies and shares extended recent gains.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index decreased 0.1% as of 8:22 a.m. London time, the first retreat in more than a week. The Stoxx Europe 600 Index advanced 0.1%. The MSCI All-Country World Index increased 0.1%, hitting the highest in more than four weeks with its sixth consecutive advance. The MSCI Emerging Market Index gained 0.3% to the highest in more than five weeks.

Currencies

The Bloomberg Dollar Spot Index sank 0.3% to the lowest in more than 15 weeks. The euro advanced 0.2% to $1.15. The Japanese yen increased 0.1% to 108.28 per dollar. The British pound was steady at $1.27. The MSCI Emerging Markets Currency Index gained 0.1%.

Bonds

The yield on 10-year Treasuries declined three basis points to 2.72%, the biggest fall in more than a week. Germany’s 10-year yield declined one basis point to 0.24%. Britain’s 10-year yield dipped one basis point to 1.26%. The spread of Italy’s 10-year bonds over Germany’s climbed less than one basis point to 2.6349  percentage points.

Commodities

The Bloomberg Commodity Index increased 0.6% to the highest in more than three weeks. West Texas Intermediate crude climbed 0.6% to $52.89 a barrel, hitting the highest in more than five weeks with its 10th consecutive advance. LME copper advanced 0.8% to $5,974.50 per metric ton, the highest in two weeks. Gold gained 0.6% to $1,294.77 an ounce, the highest in seven months.

© 2019 Bloomberg L.P