Europe erases losses and edges higher

On Monday stocks in Europe erased early losses to edge higher, while the dollar extended a decline and Treasury yields were steady as investor focus returned to the U.S. economy and tax reform at the start of a week packed with potential market catalysts.

Defensive sectors such as real estate and utilities outperformed cyclical shares in the Stoxx Europe 600 Index, with Deutsche Bank AG recommending a switch. Basic-materials stocks underperformed following a slump in industrial metal prices. The euro was little changed and bunds fluctuated as Germany moved closer to a new government. South Africa’s rand halted a slide triggered by S&P Global Ratings cutting the country’s local-currency debt to junk on Friday. Oil slipped from a two-year high before OPEC meets.

Investors are gearing up for a busy week, with President Trump scheduled to address Senate Republicans at their weekly luncheon Tuesday on taxes ahead of a potential vote on tax reform. Federal Reserve Chair Janet Yellen testifies before the congressional Joint Economic Committee in Washington, and the confirmation hearing for her nominated successor, Jerome Powell, begins. Adding to the mix are data on U.S. GDP, prices and jobs.

The Stoxx Europe 600 Index gained 0.2 percent as of 11:03 a.m. London time. The U.K.’s FTSE 100 Index jumped 0.4 percent to the highest in more than two weeks. Germany’s DAX Index climbed 0.3 percent. Japan’s Nikkei 225 Stock Average fell 0.2 percent. The MSCI Asia Pacific Index sank 0.4 percent. The MSCI Emerging Market Index dipped 0.6 percent to the lowest in a week. Futures on the S&P 500 Index increased 0.1 percent to 2,604.00, the highest on record.

West Texas Intermediate crude declined 0.8 percent to $58.48 a barrel. Gold increased 0.4 percent to $1,293.95 an ounce, the highest in six weeks. Copper fell 1 percent to $3.16 a pound.