Stocks, currencies hit pause on wait for Fed clues

Dubai - European stocks struggled to maintain gains and US equity futures and the dollar both traded sideways as investors awaited fresh insight from the Fed on the path for borrowing costs in the world’s biggest economy. China’s credit-rating downgrade sank industrial metals.

The Stoxx Europe 600 Index erased an advance as auto makers fell after the US Justice Department filed a lawsuit against Fiat Chrysler Automobiles.

Moody’s Investors Service reduced its rating on the world’s biggest commodities consumer, triggering declines across copper, nickel, zinc and iron ore. The British pound also erased gains after Prime Minister Theresa May warned that further terrorist attacks could be imminent. Crude pared an increase to trade little changed as OPEC prepared for Thursday’s key meeting in Vienna.

Moody’s action on China briefly rattled Asian markets, but against a backdrop of strengthening global growth and the impending release of minutes from the Federal Reserve’s latest meeting, investors appeared to quickly move on.

Fed Bank of Philadelphia President Patrick Harker said June “is a distinct possibility” for the US central bank’s second interest-rate increase of 2017.

Here are some key upcoming events: 

On the data front on Wednesday, notable indicators include US wholesale inventories and existing home sales numbers. Canada releases a monetary policy decision the same day, followed by South Korea on Thursday.

OPEC will meet in Vienna on Thursday, with major oil producers edging closer to extending an agreement to curb output.

Here are the main moves in markets:

Currencies

The pound was flat at $1.2961 as of 12:00, following a two-day loss. The euro was little changed at $1.1191. The Bloomberg Dollar Spot Index edged lower after climbing 0.3% on Tuesday.

Commodities

Nickel slumped 2.1% and copper fell 0.6%. Iron ore futures dropped 4.7%. China is the top user of materials. West Texas oil was little changed at $51.43 a barrel after a five-day advance. Gold added 0.1% to $1 252.49 an ounce, after dropping 0.8% on Tuesday.

Stocks

The Stoxx Europe 600 Index was unchanged. Futures on the S&P 500 were little changed. The underlying gauge rose 0.2% on Tuesday, reaching as high as 2 400.85, two points from a closing record.

Bonds

The yield on 10-year Treasury notes fell less than one basis point to 2.27%. Bonds fell during the previous four days. Yields on benchmark French and German benchmark bonds dropped two basis points.

Asia

The Shanghai Composite rose 0.1%, reversing a drop of 1.3%. The Hang Seng also ended higher after an earlier decline of 0.4% Japan’s Topix index climbed 0.6%, while Indonesia’s benchmark index slumped 0.7%. The Australian dollar slipped 0.1%, paring a steeper drop of as much as 0.5%.

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