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(Bloomberg) -- The S&P 500 Index rose to a record as gains in oil and copper drove a gauge of commodities to a six-month high. Treasuries fell after Federal Reserve Chair Janet Yellen suggested gradual rate increases are warranted despite soft inflation.
The pound broke a five-day winning streak on speculation that Brexit talks could be headed for a breakdown. Spain’s IBEX 35 Index declined and the euro weakened amid the stand-off over independence for Catalonia. The dollar extended gains after people familiar with the matter said Stanford University economist John Taylor, a candidate to be the next Fed chairman, made a favorable impression on President Donald Trump after an interview.
WTI crude rose to a two-week high on concern tensions between Iraqi forces and Kurds will disrupt supplies, while copper surged to the highest since July 2014.
Yellen said on Sunday her “best guess” is consumer prices will soon accelerate after a period of surprising softness, a forecast echoed by European Central Bank President Mario Draghi and Bank of England Governor Mark Carney. A host of Fed speakers and the publication of the Beige Book this week may provide further clues about the U.S. policy path.
In Spain, investors are awaiting the next move in a crisis that has weighed on Spanish assets and may also roil the euro. Catalan President Carles Puigdemont defended his region’s claim to independence as the Spanish government signaled it will move ahead with the process of suspending self-rule this week. Puigdemont has until Thursday morning to back down, Deputy Prime Minister Soraya Saenz de Santamaria said.
Elsewhere, Mexico’s peso fell to a five-month low after President Donald Trump’s administration made aggressive demands during a fourth round of negotiations on the future of the North American Free Trade Agreement. Developing-nation stocks extended gains.
Terminal subscribers can read more in our Markets Live blog.
Here are some key events coming up this week:
- Among Fed speakers lined up this week are Philadelphia Fed President Pat Harker on Tuesday, and New York Fed President Bill Dudley and Dallas Fed President Robert Kaplan On Wednesday. The Fed’s Beige Book will also be published on Wednesday.
- U.S. economic data will include a couple of September housing reports. Beginning construction on new homes and sales of previously owned properties will probably show the negative effects of Hurricanes Harvey and Irma on demand and building.
- China releases data for GDP, industrial production and retail sales on Thursday.
- Earnings season gets into full swing with major U.S. financial firms including Morgan Stanley, Goldman Sachs Group Inc. and Blackstone Group LP. posting results. Netflix Inc. and General Electric Co. are also reporting.
- Bank of England Governor Mark Carney appears before the U.K. Parliament’s Treasury Committee for the first time since June’s election on Tuesday.
Here are the main moves in markets:
- The S&P 500 Index rose 0.2 percent at the close in New York.
- The Stoxx Europe 600 Index closed little changed.
- Spain’s IBEX Index decreased 0.8 percent.
- The MSCI Emerging Market Index added 0.5 percent to the highest in six years.
- The Bloomberg Dollar Spot Index gained 0.2 percent.
- The euro decreased 0.2 percent to $1.1792.
- The British pound slipped 0.3 percent to $1.3249, the first retreat in a week.
- The Japanese yen weakened 0.3 percent to 112.16 per dollar.
- The yield on 10-year Treasuries rose three basis points to 2.3 percent.
- Germany’s 10-year yield declined three basis points to 0.37 percent.
- Britain’s 10-year yield dipped three basis points to 1.33 percent.
- Spain’s 10-year yield decreased four basis points to 1.55 percent.
- WTI crude rose 0.8 percent to $51.86 a barrel.
- Gold slipped 0.7 percent to $1,294.40 an ounce.
- Copper climbed 3.4 percent to $3.239 a pound, the highest in three years.
--With assistance from Andreea Papuc Adam Haigh Lu Wang Robert Brand and Cormac Mullen
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