BLBG: Europe Stocks Pare Weekly Gain as Bonds, Copper Rise
European stocks fell, paring their biggest weekly gain since February, while bonds advanced before a speech by Federal Reserve Chair Janet Yellen. Copper rose for a third day, and corporate bond risk slid for a second week.
The Stoxx Europe 600 Index slid 0.2 percent, trimming its gain to 2.1 percent this week, while Standard & Poor’s 500 Index futures lost less than 0.1 percent after the gauge closed at a record. The yield on 10-year Treasuries fell for a second day. Copper climbed 0.6 percent in London, extending its first weekly advance in a month. The MSCI Emerging Markets Index rose 0.3 percent, while European corporate credit risk is heading for its biggest weekly decline in more than two months.
Yellen speaks today at the annual Fed symposium in Jackson Hole, Wyoming. European Central Bank President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda will also attend. Investors added more than $1.9 trillion to the value of global equities in the past two weeks to $65.8 trillion, near the record reached July 3. U.S. 10-year yields are close to their highest level since 1999 relative to German bunds.
“The market is positioning itself in anticipation of a dovish stance from the Fed chair, so the hurdle for Yellen exceeding this is somewhat high,” said Richard McGuire, head of rates strategy at Rabobank International in London. “Yellen is taking a circumspect view of the labor market, and Draghi a circumspect view of additional stimulus, but they are moving in different directions. That should support the trend of bunds outperforming U.S. Treasuries.”
To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Cecile Vannucci in London at cvannucci1@bloomberg.net
To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net Stuart Wallace
