Miners trim second weekly gain
The Stoxx Europe 600 Index trimmed its weekly gain to 0.6 percent. The European Central Bank president said the recovery isn’t strong enough yet and the current level of monetary support is key. Miners declined with metals, while bond proxies such as utilities and telecom companies dropped as global bonds headed for their biggest two-week slide in at least 26 years.
While European equities climbed for a second week, the market has been hit by large intraday swings. The Stoxx 600 has alternated between gains and losses during market sessions for nine straight days, its longest streak in two years. After the initial rally that followed Donald Trump’s presidential win, the gauge has failed to keep its momentum.
Last week’s U.S. vote has dominated market moves in recent sessions, with investors betting on industries Trump’s policy stances could affect. Speculation he will spend more on infrastructure had buoyed commodity stocks, while lenders surged on optimism he may ease regulatory oversight.
The Trump-trade has dominated markets this week. The dollar is poised for its best rally in more than 15 years against the yen and bonds around the world were on course for their biggest two-week loss in at least 26 years. Central banks in Asia were compelled to take steps to shore up their currencies, while the greenback’s strength also weighed on commodities. Gold tumbled to the lowest in more than five months with a drop of 1.1 percent to $1,202.96 an ounce.
Speculation the Federal Reserve will raise interest rates more rapidly than had previously been thought priced into financial markets. In her first public statement since the vote, Fed Chair Janet Yellen told lawmakers on Thursday that the central bank is close to boosting borrowing costs. Speculation that Trump’s new administration will increase fiscal stimulus was already bolstering bets on further hikes in 2017.
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