Breaking News
0

World stocks ride out oil rout as focus turns to Fed

Stock MarketsJul 17, 2018 05:09AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. World stocks ride out oil rout as focus turns to Fed

By Alasdair Pal

LONDON (Reuters) - World stocks recovered some ground on Tuesday as oil prices stabilised, while the dollar edged lower and most other markets were subdued before Federal Reserve Chair Jerome Powell testifies to the U.S. Congress.

MSCI's world equity index, which tracks shares in 47 countries, was broadly unchanged, with energy companies in Europe and Asia recovering ground from early losses caused by the previous day's turbulence in commodity markets.

Brent crude initially fell for a second day after a 4 percent slump on Monday, as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers, but they recovered to trade up 0.5 percent.

Europe's Stoxx 600 was up 0.1 percent. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 percent, snapping two days of gains amid concern over growth in China.

In Europe, technology stocks fell 0.4 percent after U.S. tech giant Netflix (NASDAQ:NFLX) missed estimates for growth in subscribers.

"It's been a fairly sluggish and unexciting start to the week for markets. Whether things get more interesting or not probably depends on what Fed Chair Jerome Powell has to say when he testifies today in front of the Senate Banking Committee," said Craig Nichol, a macro strategist at Deutsche Bank (DE:DBKGn).

In currencies, the dollar index fell 0.1 percent against a basket of six major currencies to 94.409. The index shed 0.25 percent on Monday, nudging away from a two-week high of 95.241 on Friday.

POWELL TIME

Powell will testify on the economy and monetary policy before the U.S. Senate Banking Committee on Tuesday and the House of Representatives Financial Services Committee on Wednesday.

He is likely to reiterate the Fed's stance towards gradual monetary policy tightening. Markets will focus on his views on recent trade tensions.

"In short, we expect the chairman to signal optimism on growth and inflation, consistent with continued 'gradual' tightening," wrote Jim O'Sullivan, chief economist at High Frequency Economics.

"He will undoubtedly acknowledge some downside risks associated with the administration's trade warmongering, but he will likely try to avoid sounding critical of the administration."

Even before Powell's testimony, traders said the Sino-US trade conflict was keeping a keeping a lid on equity prices and currencies in both countries.

The Chinese government said on Tuesday it would hit its 2018 growth target, a day after it reported slower growth in the second quarter and the weakest expansion in factory activity in June in two years.

On Tuesday, economists at UBS lowered their estimates for Chinese gross domestic product to take into account trade war escalation, warning clients the country's currency is likely to weaken.

Chinese stocks were among the biggest losers in Asia on Tuesday, falling 1.7 percent.

Trading in government bonds was largely subdued ahead of Powell's testimony. Euro zone government bond yields across the bloc inched lower by 0.5 to 2 basis points, with investors unwilling to push yields any higher before Powell testifies.

World stocks ride out oil rout as focus turns to Fed
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email