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US stocks gain as traders look past Korea summit

Fed rate hike. Brexit vote in Parliament more of a concern for markets

Gulf News

New York

The meeting between President Donald Trump and Kim Jong Un was met with a collective shrug by global markets, which appear to be more fixated on a host of macro events and data due in a few days.

The S&P 500 Index opened higher on Tuesday, led by technology shares, while yields on 10-year Treasuries pushed closer to the 3 per cent threshold. Safe-haven assets including the yen and gold edged lower as Trump and Kim signed a document pledging to work toward peace on the Korean peninsula.

There was never much prospect of the summit triggering a large market reaction, except perhaps in the event of a shock outcome. A seemingly certain Federal Reserve rate increase on Wednesday, plus the prospect of a hawkish European Central Bank tilt on Thursday, tease far more concrete developments for traders. Tuesday’s US inflation figures — which were in line with estimates — may even reignite the four-hikes-in-2018 debate ahead of the Fed’s decision.

“The world tour from Canada and to Singapore concluded with a photo-op, a handshake and little details on the how to achieve denuclearisation,” Mark McCormick, North American head of foreign-exchange strategy at Toronto-Dominion Bank, wrote in an email to clients. “That leaves markets pivoting back to more predictable events like data and central bank decisions.”

Read more: Investors React to Trump-Kim Deal

The Stoxx Europe 600 Index opened higher, but pared its advance after modest gains for many Asian shares failed to ignite the MSCI Asia Pacific Index. The pound fluctuated before Theresa May’s Brexit legislation goes to Parliament, as data showed a surprise moderation in the pace of UK wage growth.

Elsewhere, West Texas oil hovered around $66 a barrel as a divide between Opec nations over whether to ease production deepened. The Turkish lira led a drop in emerging-market currencies ahead of the possible US rate increase, which could suck more cash from developing nations.

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