(Bloomberg) — Stocks fell and the dollar rose after comments from Minneapolis Fed President Neel Kashkari dampened hopes that the U.S. central bank would cut interest rates soon.
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S&P 500 futures lost 0.3%, suggesting the U.S. stock benchmark will break a six-day winning streak, while Europe’s Stoxx 600 index was little changed. West Texas Intermediate crude oil prices fell below $80 a barrel for the first time in more than two months. The dollar became stronger.
Kashkari said in an interview on Fox News on Monday that it was too early to declare victory over inflation. He added that while there have been promising data on inflation for three months, it is not enough.
“There are a number of risk factors that could prevent inflation from easing in the nice, orderly way that people who expect central banks to turn around would like to see,” said Tom O’ Hara, portfolio manager at Janus Henderson Investors.
Meanwhile, bond markets broadly rose, led by the United Kingdom, as Bank of England chief economist Huw Pill suggested interest rate cuts could be on the table by mid-2024 and German industrial production figures suggested a recession was not far away is removed. The two-year Treasury yield fell 11 basis points to 4.61%, and the 10-year Treasury rate fell five basis points to 4.59%.
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Among individual stock drivers, oil producers pushed European equity benchmarks lower, with Shell Plc and BP Plc falling more than 1%.
UBS Group AG rose 3.7% after reporting stronger-than-expected client inflows into its wealth management business. Watches of Switzerland Group Plc, the leading U.K. Rolex retailer, rose 10% after saying it will more than double sales and profits by 2028.
The story goes on
In Asian markets, South Korea’s Kospi index fell 2.3% after Monday’s rally sparked by a short-selling ban. Australia has resumed tightening monetary policy and raised its inflation forecast, a sign that central banks are not necessarily done raising interest rates.
Important events this week:
China’s foreign exchange reserves, Tuesday
Eurozone PPI, Tuesday
US trading, Tuesday
UBS results, Tuesday
Kansas City Fed President Jeff Schmid and his Dallas counterpart Lorie Logan speak Tuesday
Eurozone retail sales, Wednesday
Germany CPI, Wednesday
BOE Governor Andrew Bailey speaks on Wednesday
US wholesale inventories, Wednesday
New York Fed President John Williams speaks on Wednesday
The Bank of Japan will publish a summary of statements for October on Thursday
BOE chief economist Huw Pill talks about the economy on Thursday
Initial jobless claims in the US, Thursday
Fed Chair Jerome Powell will take part in a panel discussion on monetary policy challenges at the IMF’s annual research conference in Washington on Thursday
Atlanta Fed President Raphael Bostic and his Richmond counterpart Tom Barkin speak Thursday
British industrial production, GDP, Friday
ECB President Christine Lagarde will take part in the fireside chat on Friday
University of Michigan Consumer Sentiment, Friday
Dallas Fed President Lorie Logan and her Atlanta counterpart Raphael Bostic speak Friday
Some of the key moves in the markets:
Shares
The Stoxx Europe 600 was little changed at 10:47 a.m. London time
S&P 500 futures fell 0.1%
Nasdaq 100 futures fell 0.1%
Futures on the Dow Jones Industrial Average fell 0.1%
The MSCI Asia Pacific Index fell 1.3%
The MSCI Emerging Markets Index fell 0.9%
Currencies
The Bloomberg Dollar Spot Index rose 0.3%
The euro fell 0.3% to $1.0684
The Japanese yen fell 0.2% to 150.35 per dollar
The offshore yuan was little changed at 7.2872 per dollar
The British pound fell 0.3% to $1.2301
Cryptocurrencies
Bitcoin fell 1.1% to $34,644.77
Ether fell 1% to $1,874.45
Tie up
The 10-year Treasury yield fell six basis points to 4.59%
The yield on 10-year German government bonds fell five basis points to 2.68%
The 10-year UK government bond yield fell nine basis points to 4.29%
raw materials
Brent crude fell 1.9% to $83.56 a barrel
Spot gold fell 0.6% to $1,966.81 an ounce
This story was produced with support from Bloomberg Automation.
– With support from Chiranjivi Chakraborty.
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