Breaking News

Global stocks capped by trade war concerns, central banks

Stock MarketsJun 13, 2018 12:03PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE)

By Nick Brown

NEW YORK (Reuters) - Stocks across the globe wavered on Wednesday on fears of trade tensions and questions about U.S. interest rates, while lower-than-expected inventory data sent oil prices into the black after morning losses.

Investors are awaiting the U.S. Federal Reserve's 2:00 p.m. ET (1800 GMT) decision on monetary policy, with the year's second interest rate hike almost certain.

But market participants are keen to know how many times the Fed will raise rates in 2018, with market pricing "fairly split between three and four hikes," Deutsche Bank (DE:DBKGn) strategist Jim Reid wrote in a note to clients.

Amid the uncertainty, Wall Street opened slightly firmer, buoyed by a jump in media stocks after Tuesday's court ruling allowing AT&T's $85 billion take over of Time Warner - a move expected to trigger a wave of corporate mergers.

Shares of the HBO channel owner (N:TWX) jumped about 3 percent after the approval, while AT&T (N:T) dropped 1.6 percent.

Overall, stock markets were moving up, but tepidly.

The Dow Jones Industrial Average (DJI) rose 18.88 points, or 0.07 percent, to 25,339.61, the S&P 500 (SPX) gained 4 points, or 0.14 percent, to 2,790.85 and the Nasdaq Composite (IXIC) added 42.30 points, or 0.55 percent, to 7,746.09.

The pan-European FTSEurofirst 300 index (FTEU3) rose 0.19 percent, and MSCI's gauge of stocks across the globe (MIWD00000PUS), which has been stagnating near one-month highs for about a week, gained 0.09 percent.

Equity markets are "finding it difficult to make upward progress despite reasonably good economic data", said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

Along with the Fed and other key central bank policy meetings this week, fresh fears of protectionism are weighing on stocks and currencies as the U.S. prepares to unveil more tariffs on $50 billion worth of Chinese goods.

Emerging market stocks lost 0.37 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) closed 0.58 percent lower.

Trade tensions pressured the Mexican peso and Canadian dollar, which gained 0.46 and 0.35 percent, respectively, versus the greenback.

The dollar index (DXY), which measures the U.S. currency against a basket of others, fell 0.2 percent, with the euro (EUR=) up 0.29 percent to $1.1777.


Oil prices, which had started the day in the red, rose after a report by the Energy Information Administration indicated U.S. crude inventories fell more than anticipated last week and while gasoline and distillate stocks surprised with unexpected declines.

U.S. crude was up 0.36 percent to $66.60 per barrel and Brent was last at $76.36, up 0.63 percent on the day. Gasoline futures (RBc1) were up 1.1 percent to $2.1124 a gallon.

"You tend to want to see draws in gasoline early in the summer with driving season, and this is the first number that actually does that ... in three weeks," said Bob Yawger, director of energy futures at Mizuho in New York.

In government bonds, U.S. Treasury yields were flat on Wednesday, moving in narrow ranges, with investors firmly focused on the Fed meeting.

Benchmark 10-year notes (US10YT=RR) last rose 1/32 in price to yield 2.9535 percent, from 2.957 percent late on Tuesday.

The 30-year bond (US30YT=RR) last rose 6/32 in price to yield 3.0823 percent, from 3.092 percent Tuesday.

Italian government bonds were in demand, as well, after Paolo Savona, the country's new EU Affairs Minister, said the euro was "indispensable."

The comments by Savona, who has previously expressed hostile views on the euro, followed statements earlier in the week by Italy's new coalition government that it had no plans to leave the euro zone.

In another reminder of the danger of trade disputes, shares in Chinese telecommunications giant ZTE Corp (HK:0763) fell as much as 41.5 percent, wiping $3 billion off its market value, as it resumed trade after agreeing to pay up to $1.4 billion in penalties to the U.S. government.

Global stocks capped by trade war concerns, central banks

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’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
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?
Replace the attached chart with a new chart ?
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'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
Sign up with Email