Dublin
The dollar fell and global stocks were mixed in a day packed with catalysts for markets. Investors are weighing the shortlist of candidates said to be in the running for the leadership of the Federal Reserve, as well as strong data out of Europe, mounting concerns about the crisis in Catalonia and speeches from Russian President Vladimir Putin and UK Prime Minister Theresa May.
The Bloomberg Dollar Spot Index and 10-year Treasury yields both retreated from recent highs as news emerged that President Trump has been presented with a shortlist of Fed-chair candidates with a range of views on policy. Among them, ex-board member Kevin Warsh has criticised the central bank for trying to do too much with monetary policy while current Governor Jerome Powell has voted in sync with Chair Janet Yellen, who’s term is up in February.
The euro advanced and most European bond yields fell as data showed the Euro-area economy picked up in September, and the stronger currency weighed on the Stoxx Europe 600 Index. Yields in the periphery underperformed as those on Spanish notes rose on news that Catalonia’s leader Carles Puigdemont will release a statement at 9pm. CET. The region’s separatist leadership has dismissed condemnation by King Felipe VI, insisting Wednesday that nothing will deflect them from setting up an independent republic.
“As far as market reaction is concerned the short-term effect is that investors would be reluctant to hold Spanish exposure ahead of this event risk,” said Antoine Bouvet, an interest-rate strategist at Mizuho International Plc.
Crude oil remained lower as President Vladimir Putin said Russia may agree to extend a deal with Opec to curb oil supplies beyond March to the end of 2018, though he’ll wait to make a decision until nearer the end of the existing pact. Sterling rose as UK Prime Minister Theresa May sought to draw a veil over infighting within her Conservative Party, with a speech promising to cap energy prices and build more social housing.
Earlier, Hong Kong equities added to yesterday’s surge on optimism about monetary loosening in China. Japanese stocks were little changed, and Australia’s declined.