Dollar Trades Steady; Stocks to Start Week Mixed: Markets Wrap

Currency markets began the week in a muted fashion and stocks looked set to open mixed, with investors weighing uncertainty over the prospects for more U.S. stimulus. Oil climbed.

The dollar was steady against all G-10 peers in early Monday trading. S&P 500 futures opened little changed after American shares ended higher last week. Asian-equity index futures pointed to small declines in Hong Kong, while Australian contracts edged up. Japan is shut for the Mountain Day holiday and Treasuries won’t trade until the London open. Gold slipped.

U.S. President Donald Trump signed four executive orders related to coronavirus economic relief, including expanded unemployment benefits, a temporary payroll tax deferral, eviction protection and student-loan relief. Treasury Secretary Steven Mnuchin said he’d listen to any proposal offered by Democrats and Nancy Pelosi said she hopes talks with the White House will resume soon.

Investors are grappling with an unclear timeline, with neither side giving a firm date for discussions to restart during interviews on Sunday political talk shows. Democrats and Republicans are trillions of dollars apart on overall spending and on key issues, including on aid to state and local governments and the amount of supplementary unemployment benefits.

“The delay in announcing the U.S. virus relief package of over 1 trillion dollars has put more pressure on the U.S. economy,” said Simon Ballard, chief economist at First Abu Dhabi Bank Pjsc. “The main focus will be on escalating U.S.-China relations and progress on their trade deal talks.”

Meantime, the U.S. passed 5 million infections after adding 1 million new cases in just over two weeks. Germany’s transmission rate rose to the highest level in 10 days. Paris will mandate masks outdoors on its busiest streets starting Monday.

Here are some key events coming up:

  • Earnings include Barrick Gold, SoftBank, Telstra, Deutsche Telekom, Carlsberg, Tencent and JD.com.
  • New Zealand’s policy decision is due on Wednesday.
  • China releases a slew of data for July on Friday, including industrial production and retail sales.
  • U.S. retail sales are expected Friday, with a smaller increase forecast for July than in the prior two months.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 dipped 0.1% as of 7:07 a.m. in Tokyo. The index rose 0.1% on Friday.
  • Futures on Australia’s S&P/ASX 200 Index advanced 0.7%.
  • Hang Seng Index futures slid 0.2%.

Currencies

  • The yen was little changed at 105.90 per dollar.
  • The offshore yuan traded at 6.9694 per dollar.
  • The euro bought $1.1787.
  • The Australian dollar was at 71.57 U.S. cents.

Bonds

  • The yield on 10-year Treasuries rose more than two basis points to 0.56% on Friday.

Commodities

  • West Texas Intermediate crude rose 1% to $41.59 a barrel.
  • Gold was at $2,027.34 an ounce, down 0.4%.

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