Bloomberg News - U.S. Stocks Climb at Start of Busy Week; Bonds Dip: Markets Wrap

By Yakob Peterseil and Sarah Ponczek

U.S. equities gained at the start of a week filled with potentially significant catalysts from central bank meetings, geopolitical developments and economic data. Treasuries and the dollar drifted lower.

The S&P 500 and Nasdaq opened slightly higher, while Dow contracts slipped as Boeing Co. declined on reports that the U.S. Transportation Department was examining the 737 Max’s design certification.

Equities are grinding higher and volatility is declining on expectations the Fed will point the way to just one rate hike in 2019 when it meets later this week. Other central bank gatherings, including for the Bank of England, will give further clues on monetary policy. In politics, investors are keeping an eye on this week’s Brexit developments as the British prime minister works to win support for her divorce agreement.

“The stock market has priced in a very dovish Fed and a stabilization of U.S. and global growth,” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, wrote to clients. “Both expectations need to be met by the events this week in order for this rally to keep going.”

European stocks nudged up, led by miners and lenders as Deutsche Bank AG and Commerzbank AG got the green light to proceed with negotiations on a tie-up. In Asia, Chinese and Hong Kong shares led the advance. The pound fell as Prime Minister Theresa May continued to face opposition to her Brexit plans.

Elsewhere, oil fluctuated as OPEC and its allies recommended deferring a decision on whether to extend oil production cuts until June. Emerging market currencies and shares climbed. Gold gained.

Here are some key events coming up:

• Company earnings include FedEx, China Telecom, Tencent, Porsche, BMW, Hermes, Tiffany, Micron, Nike and PetroChina.
• The Fed is expected to hold interest rates steady, announce the end of asset roll-off from its balance sheet, and lower projections for the number of interest-rate hikes this year. The decision is due Wednesday.
• Central banks in Thailand, the Philippines and Indonesia are all scheduled for policy meetings.
• In the euro zone, purchasing manager survey numbers on Friday will give an indication of the health of the region’s industrial and service sectors at the end of the first quarter.

These are the main moves in markets:

Stocks

• The S&P 500 Index advanced 0.2 percent as of 9:35 a.m. New York time.
• The Stoxx Europe 600 Index climbed 0.1 percent.
• The U.K.’s FTSE 100 Index gained 0.6 percent.
• Germany’s DAX Index declined 0.3 percent, the biggest drop in more than a week.
• The MSCI Emerging Market Index advanced 1.1 percent to the highest in almost seven months.

Currencies

• The Bloomberg Dollar Spot Index decreased 0.1 percent.
• The euro gained 0.2 percent to $1.1345, the strongest in more than two weeks.
• The British pound dipped 0.4 percent to $1.3243.
• The Japanese yen fell less than 0.05 percent to 111.53 per dollar.

Bonds

• The yield on 10-year Treasuries increased one basis point to 2.60 percent.
• Germany’s 10-year yield climbed one basis point to 0.09 percent, the highest in more than a week.
• Britain’s 10-year yield fell less than one basis point to 1.209 percent.

Commodities

• West Texas Intermediate crude advanced less than 0.05 percent to $58.54 a barrel.
• Gold climbed 0.2 percent to $1,305.44 an ounce.

— With assistance by Sophie Caronello, and Adam Haigh