(Bloomberg) — U.S. equity futures climbed alongside stocks in Europe and Asia as investors cheered fresh signs from central bankers that rates are headed lower. Treasuries were steady, while the dollar declined.
Contracts on the main U.S. gauges gained a day after the S&P 500 briefly topped 3,000 for the first time on signals that Federal Reserve Chairman Jerome Powell is willing to lower rates, citing a slowing global economy and trade issues. The Stoxx Europe 600 Index headed for the first advance in five days, spurred by energy companies as crude rallied. Shares rose across most of Asia with the South Korean and Hong Kong markets outperforming and stocks in China edging higher.
Emerging-market stocks climbed along with currencies, while the pound continued its rebound from a two-year low. European government bonds were mixed.
This year’s rallies across stocks, bonds and credit got a fresh jolt on Wednesday thanks to comments from Fed Chairman Powell that persuaded investors rates are headed lower by at least a quarter-point in July. Minutes from the central bank’s last meeting further cemented expectations for a cut in borrowing costs. Traders will be eyeing ECB minutes and Powell’s testimony before the Senate Banking Committee on Thursday for further clues.
“There has been a total shift in monetary policy — quantitative tightening is off the table and we’re back to some mild form of quantitative easing or stable central bank balance sheets,” said Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs. “That’s very supportive for equities.”
Elsewhere, oil extended gains on crude output cuts ahead of a potential hurricane in the Gulf of Mexico.
Here are some key events coming up:
Powell testifies to Senate Banking Committee on Thursday.ECB minutes are due on Thursday.A key measure of U.S. inflation — the core consumer price index, due Thursday — is expected to have increased 0.2% in June from the prior month, while the broader CPI is forecast to remain unchanged.U.S. producer prices are due on Friday.
Here are the main moves in markets:
Futures on the S&P 500 Index gained 0.2% as of 7:24 a.m. New York time, the highest on record.The Stoxx Europe 600 Index rose 0.2%, the first advance in a week and the biggest advance in more than a week.The Shanghai Composite Index climbed 0.1%.The MSCI Emerging Market Index gained 0.7%, the biggest rise in more than a week.
The Bloomberg Dollar Spot Index declined 0.2%, the lowest in a week.The euro increased 0.2% to $1.1269, the strongest in a week.The British pound increased 0.4% to $1.2558, the strongest in a week on the largest climb in three weeks.The onshore yuan climbed 0.1% to 6.865 per dollar, the strongest in more than a week.The Japanese yen rose 0.3% to 108.14 per dollar, the strongest in a week.
The yield on 10-year Treasuries decreased less than one basis point to 2.06%.The yield on two-year Treasuries declined two basis points to 1.81%, the lowest in a week.
West Texas Intermediate crude gained 0.3% to $60.60 a barrel, reaching the highest in seven weeks on its sixth straight advance.Iron ore fell 1.4% to $113.07 per metric ton.Gold decreased less than 0.05% to $1,418.91 an ounce.
–With assistance from Ruth Carson, Chester Yung, Cormac Mullen and Gregor Stuart Hunter.
To contact the reporter on this story: Laura Curtis in London at firstname.lastname@example.org
To contact the editors responsible for this story: Samuel Potter at email@example.com, Yakob Peterseil
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.