Europe stocks drop as tax vote spurs S&P futures: Markets wrap

Bloomberg.- Stocks in Europe retreated on Wednesday after a mixed session in Asia, even as S&P 500 futures advanced as U.S. lawmakers moved closer to a tax overhaul. The dollar was little changed and Treasuries were steady, but core European bonds resumed a selloff.

Telecom and bank shares led the decline in the the Stoxx Europe 600 Index, with Spanish equities underperforming before tomorrow’s Catalan poll. Miners gained as the Bloomberg Commodity Index advanced for a sixth day. Earlier, Japan’s Topix index closed at its highest level since November 1991, while stocks in Hong Kong and China declined. Core European bond yields rose even as Treasury yields were little changed after yesterday’s jump, sparked by hawkish comments from central bankers.

The U.S. Senate approved the tax-cut legislation in a 51-48 party line vote, bringing President Donald Trump to the brink of his first major legislative victory. The bill now moves to the House of Representatives for a final vote Wednesday. With corporate and individual tax rates set to drop, the measures are largely anticipated to add to growth over the next year or two, though they will also swell the budget deficit.

Meanwhile, oil gained as industry data was said to show a larger-than-expected drop in U.S. crude stockpiles. Gold edged higher and industrial metals rose, led by nickel.

Among the key events investors will be watching this week:

– The U.S. and U.K. publish updated estimates of third-quarter GDP.
– The Bank of Japan meets on Thursday to set monetary policy.
– Catalonia votes in an election Thursday that will pose a test for the Spanish region’s secession movement.

And these are the main moves in markets:

Stocks

– The Stoxx Europe 600 Index fell 0.1 percent as of 7:57 a.m. New York time.
– The U.K.’s FTSE 100 Index gained less than 0.05 percent to the highest in six weeks.
– Germany’s DAX Index decreased 0.3 percent.
– Futures on the S&P 500 Index increased 0.3 percent.
– Japan’s Topix index was up 0.3 percent at the close in Tokyo, while the Nikkei 225 Stock Average rose 0.1 percent.
– Hong Kong’s Hang Seng Index fell 0.1 percent while the Shanghai Composite Index declined 0.3 percent.
– Australia’s S&P/ASX 200 was up 0.1 percent.

Currencies

– The Bloomberg Dollar Spot Index gained less than 0.05 percent.
– The euro advanced less than 0.05 percent to $1.1843, the strongest in more than two weeks.
– The British pound climbed 0.1 percent to $1.3405.
– The Japanese yen dipped 0.3 percent to 113.19 per dollar, the weakest in a week.

Bonds

– The yield on 10-year Treasuries gained less than one basis point to 2.47 percent, hitting the highest in nine months with its fifth straight advance.
– Germany’s 10-year yield advanced two basis points to 0.40 percent, the highest in five weeks.
– Britain’s 10-year yield climbed four basis points to 1.148 percent, the highest in more than a week.

Commodities

– West Texas Intermediate crude advanced 0.4 percent to $57.77 a barrel, the highest in more than a week.
– Gold gained 0.3 percent to $1,265.83 an ounce, the highest in two weeks.
– Copper increased 0.5 percent to $3.17 a pound, reaching the highest in more than three weeks on its 11th consecutive advance.
– The Bloomberg Commodity Index climbed 0.4 percent to 84.94, hitting the highest in two weeks with its sixth straight advance.

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