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Stocks Climb on Rate-Cut Bets; Dollar Declines: Markets Wrap



(Bloomberg) – US 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.

Emerging-market stocks climbed along with currencies, while the pound continued its rebound from a two-year low. Stocks rose in most of Asia with the South Korean and Hong Kong markets outperforming and stocks in China.

This year's rallies over 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 latest meeting further set expectations for a cut in borrowing costs. Traders will be looking at ECB minutes and Powell's testimony before the Senate Banking Committee on Thursday for further clues.

"There has been a 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. "It's very supportive for equities."

Elsewhere, oil has increased the 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 US inflation – the core consumer price index, due Thursday – is expected to have increased 0.2% in June from the previous month, while the broader CPI is forecast to remain unchanged.U.S. 19659010] Stocks

Futures on the S & P 500 Index gained 0.2% as of 7:24 am New York Times, 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 Bloomberg Dollar Spot Index declined 0.2%, the lowest in a week. The euro grew 0.2% to $ 1.1269, the strongest in a week. The British pound rose 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 Bonds

Bonds

The yield on the 10-year Treasuries declined by more 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. 19659016] Commodities

West Texas Intermediate crude gained 0.3% to $ 60.60 a barrel, reaching the highest in the seven weeks on his sixth straight advance.Iron ore fell 1.4% to $ 113.07 per metric ton.Gold dropped less than 0.05% to $ 1,418.91 an ounce

– With help from Ruth Carson, Chester Yung, Cormac Mullen and Gregor Stuart Hunter.

To contact the reporter on this story: Laura Curtis in London at lcurtis7@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Yakob Peterseil

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