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(Bloomberg) -- European stocks struggled for traction and bonds pared gains as investor focus switched back to central banks after the release of minutes of last month’s Federal Reserve meeting. Treasury yields nudged lower and the dollar drifted after halting a decline to a one-week low.
Fed officials debated hard last month over whether forces holding inflation down were persistent or temporary. Investors are still betting they will press ahead with an interest-rate hike in December. The Stoxx Europe 600 inched higher and the euro remained steady as Spanish Prime Minister Mariano Rajoy kept pressure on Catalan separatists. Spanish stocks gained and bond yields were little changed. The British pound reversed an advance to slump after the EU’s chief negotiator for Brexit said talks had reached deadlock.
“We expect that only a further unanticipated decline in inflationary pressures would prevent the Fed from moving in December,” said David Sloan, senior economist at Roubini Global Economics. “Looking further ahead, however, inflation is likely to need to show some improvement if three more rate hikes are to be delivered in 2018.”
As investors digest the Fed minutes, the selection of Chair Janet Yellen’s replacement is also coming into focus. President Donald Trump is meeting this week with Stanford University economist and rates hawk John Taylor, who is on the shortlist of candidates, according to people familiar. Meanwhile, there is a lineup of global central bank speakers later on Thursday in Washington, who may give traders further clues to the outlook for monetary policy in their respective regions.
Meanwhile, the European Union said scant progress has been made in the latest round of Brexit talks, increasing the chances of a messy departure as time is running out to clinch a deal. Lack of sufficient progress adds to pressure on businesses to speed up contingency plans for what could be a chaotic withdrawal in March 2019.
West Texas oil halted three days of gains near $51 a barrel. Oil stockpiles will fall this year for the first time since prices slumped four years ago, the IEA said Thursday. Gold climbed for a fifth day. In Asia, Japanese stocks extended gains, with the Nikkei 225 Stock Average ending at the highest level since 1996.
Bitcoin surged to a fresh record Thursday, climbing above $5,000, as the enthusiasm for cryptocurrencies showed little signs of abating.
Terminal subscribers can read more in our Markets Live blog.
What’s coming up this week:
- Earnings season begins for major U.S. banks, led by JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co.
- ECB President Mario Draghi, Fed’s Brainard participate on policy panel in Washington. ECB’s Praet, Coeure, Lautenschlaeger and BOE’s Haldane also due to speak.
- The U.K. will today publish its plan to cap domestic power and gas prices to protect consumers from what it calls "rip-off" charges at the hands of the "Big Six" utilities including Centrica, EDF, SSE and Innogy.
- The active Atlantic hurricane season will probably figure prominently in U.S. data on retail sales and consumer prices.
- On Friday from 1 p.m. Hong Kong time, Bloomberg Intelligence Chief Asia Economist Tom Orlik and Bloomberg Asia Government’s Peter Martin will be answering your questions about China’s Communist Party Congress in a TOPLive Q&A. Follow the blog at TLIV <GO>
Here are the main moves in markets:
- The Stoxx Europe 600 Index gained 0.1 percent as of 11:19 a.m. London time, the highest in a week.
- The MSCI All-Country World Index jumped 0.1 percent to the highest on record.
- The U.K.’s FTSE 100 Index climbed 0.1 percent to the highest in more than two months.
- Germany’s DAX Index increased less than 0.05 percent.
- The MSCI Asia Pacific Index jumped 0.4 percent to the highest in about 10 years.
- Topix index increased 0.2 percent to 1,700.13, the highest in more than 10 years.
- The MSCI Emerging Market Index gained 0.5 percent to 1,122.86, the highest in more than six years.
- Futures on the S&P 500 Index fell 0.1 percent to 2,550.75.
- The Bloomberg Dollar Spot Index climbed less than 0.05 percent to 1,163.12.
- The euro declined less than 0.05 percent to $1.1856.
- The British pound dipped less than 0.05 percent to $1.3222.
- The Japanese yen climbed 0.1 percent to 112.41 per dollar, the strongest in two weeks.
- The yield on 10-year Treasuries fell one basis point to 2.34 percent, the lowest in more than a week.
- Germany’s 10-year yield gained less than one basis point to 0.47 percent, the highest in two weeks.
- Britain’s 10-year yield climbed one basis point to 1.393 percent, the highest in more than eight months.
- Japan’s 10-year yield increased less than one basis point to 0.067 percent, the highest in more than a week.
- West Texas Intermediate crude declined 1 percent to $50.80 a barrel.
- Gold increased 0.2 percent to $1,294.47 an ounce, the highest in more than two weeks.
--With assistance from Ruth Liew Andreea Papuc Adam Haigh and Tugce Ozsoy
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