Cat­alo­nia re­lief nudges stocks to fresh high

Kuwait Times - - BUSINESS -

NEW YORK: US Trea­sury prices rose and world stocks were up slightly yes­ter­day ahead of the re­lease of min­utes from the Fed­eral Re­serve’s Septem­ber pol­icy meet­ing, while the euro rose after Cat­alo­nia held off on mov­ing to­wards in­de­pen­dence.

Span­ish stocks ral­lied and the euro reached a twoweek high after Cat­alo­nia’s leader, Car­les Puigde­mont, de­clined to make a for­mal in­de­pen­dence dec­la­ra­tion on Tues­day to al­low for talks with Madrid. That dis­ap­pointed many pro-in­de­pen­dence sup­port­ers but pleased fi­nan­cial mar­kets.

The euro move helped push the dol­lar in­dex down for the fourth day in row. The dol­lar was weak ahead of Fed min­utes and on un­cer­tain­ties about the prospects for US tax re­form. Wall Street’s ma­jor stock in­dexes treaded wa­ter as a jump in shares of con­sumer sta­ples was off­set by a drop in fi­nan­cials a day be­fore the start of the quar­terly re­port­ing sea­son.

“Third-quar­ter re­sults of large banks are ex­pected to be tepid,” said Stephen Big­gar, an an­a­lyst at Ar­gus Re­search. “Trad­ing rev­enue (will be) down due to low volatil­ity and loan growth re­main­ing flat to slightly neg­a­tive.” The Dow Jones In­dus­trial Av­er­age rose 15.77 points, or 0.07 per­cent, to 22,846.45, the S&P 500 gained 0.47 points, or 0.02 per­cent, to 2,551.11 and the Nas­daq Com­pos­ite added 5.49 points, or 0.08 per­cent, to 6,592.74.

A 1.3-per­cent jump in Spain’s IBEX more than re­versed its de­cline in the pre­vi­ous ses­sion while the broader eq­ui­ties mar­ket showed a lack­lus­ter per­for­mance.

The pan-Euro­pean FTSEurofirst 300 in­dex lost 0.08 per­cent and MSCI’s gauge of stocks across the globe gained 0.10 per­cent. Mean­while, the US dol­lar fell to a two-week low against a bas­ket of cur­ren­cies ahead of the Fed’s re­lease of its Septem­ber pol­icy meet­ing min­utes where it de­cided to pare the cen­tral bank’s $4.5tril­lion bal­ance sheet.

The dol­lar fell yes­ter­day to a two-week low against a bas­ket of cur­ren­cies, ahead of the US Fed­eral Re­serve’s re­lease of the min­utes on its Septem­ber pol­icy meet­ing where pol­icy-mak­ers de­cided to pare the cen­tral bank’s $4.5 tril­lion bal­ance sheet.

While the Fed re­vealed plans to re­duce its vast hold­ings of Trea­suries and mort­gage-backed se­cu­ri­ties, the min­utes may pro­vide clues on whether a US in­ter­est rate hike is planned for De­cem­ber, an­a­lysts said. The Fed will re­lease min­utes of its Sept. 19-20 meet­ing at 2 pm EDT (1800 GMT).

Also, US Pres­i­dent Don­ald Trump’s spat with Ten­nessee Sen­a­tor Bob Corker, an in­flu­en­tial fel­low Repub­li­can, raised con­cerns that Trump’s tax re­form push may be in jeop­ardy. “Squab­bles sur­round­ing Trump’s ef­forts come as no sur­prise, but it is still not help­ing the dol­lar,” said Yukio Izhizuki, se­nior cur­rency strate­gist at Daiwa Se­cu­ri­ties in Tokyo.

Mean­while, US Trea­suries in­vestors were bet­ting on a rate hike in De­cem­ber ahead of the Fed min­utes. “Speak­ers have been out in force re­cently and I think they’ve been pretty clear that a De­cem­ber rate hike is cer­tainly on the ta­ble,” said Thomas Si­mons, a money mar­ket econ­o­mist at Jef­feries in New York.

Ja­pan’s Nikkei 225 in­dex closed at a new 21-year high, ris­ing 0.3 per­cent to 20,881.27, a level it hasn’t seen since De­cem­ber 1996. South Korea’s Kospi rose 1 per­cent to 2,458.16 and Aus­tralia’s S&P/ASX 20 0.6 per­cent to 5,770.10. The Shang­hai Com­pos­ite in main­land China edged up 0.2 per­cent to 3,388.28 but Hong Kong’s Hang Seng gave up ear­lier gains to end 0.4 per­cent lower at 28,389.57. Shares in South­east Asia were mixed.

Bench­mark 10-year notes last rose 3/32 in price to yield 2.3356 per­cent, from 2.345 per­cent late on Tues­day. The 30-year bond last rose 10/32 in price to yield 2.8649 per­cent, from 2.881 per­cent late on Tues­day. Oil prices gave back ear­lier gains. US crude fell 0.41 per­cent to $50.71 per bar­rel and Brent was last at $56.24, down 0.65 per­cent on the day.

Gold prices were barely up after de­clin­ing in the pre­vi­ous day’s ses­sion. Spot gold per­cent to $1,287.92 an ounce. —Reuters

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