Markets wrap: Tech leads US stock advance; crude oil declines

NEW YORK (BLOOMBERG) -US equities gained, led by FANG shares, while European stocks pared losses following a mixed session in Asia as a big week for central-bank policy gets underway. Crude oil slumped for the first time in three days.

Facebook, Apple, Netflix and Google parent Alphabet led the Nasdaq Composite higher, while the Stoxx Europe 600 Index closed little changed. Deutsche Bank boosted lenders on reports that it's considering creating a "non-core unit" to wind down legacy assets as part of a broader overhaul. Japanese and Australian shares declined, while equities in Hong Kong rose after the government suspended a controversial extradition bill.

The dollar briefly weakened after a Federal Reserve survey of factories in New York State plunged in June by the most on record, before climbing back from the day's lows. Treasuries pared a drop on the news, but they stayed mostly lower alongside European bonds as investors looked ahead to a week in which the Fed, the Bank of Japan and the Bank of England all set monetary policy.

"We'll find out Wednesday (June 19) if the market is right about how dovish it is when it comes to monetary policy," said Arthur Hogan, chief market strategist at National Securities Corp. "So what we're looking for is affirmation of where the market is already, and anything that fails to affirm that probably is a negative toward the S&P 500." Investors will be scrutinizing the Fed's decision and messaging on Wednesday for signals on the chances of rates cuts ahead. Meanwhile, US Commerce Secretary Wilbur Ross reiterated that the prospect of a major trade deal is unlikely to emerge from a possible meeting between President Donald Trump and Chinese President Xi Jinping at the Group of 20 summit in Osaka this month.

"We know that the Fed doesn't like to surprise people and the idea at this point of them digging in their heels and saying 'absolutely no cuts,' I think is very unlikely," Josh Kutin, head of asset allocation for Columbia Threadneedle, said in an interview at Bloomberg's New York headquarters. "Will it be the full number that's priced in right now? I think that's unlikely as well. I think somewhere between is pretty fair." Elsewhere, oil futures fell as Saudi Arabia expressed hope that OPEC and its allies will agree to extend production cuts into the second half. Bitcoin jumped as much as 11 per cent, heading toward its highest close in more than a year.

Here are some key events coming up: Federal Reserve, the Bank of Japan and the Bank of England all set monetary policy, along with central banks in Norway, Brazil, Taiwan and Indonesia.

The Fed meeting begins Tuesday with a decision and press conference the next day. Officials are expected to debate a rate cut to shelter the US economy, in part, from the fallout caused by escalating trade disputes.

In the UK Tuesday there will be a second ballot on the leadership contest to choose Theresa May's successor as leader of the country's ruling party.

Final May CPI data for the euro zone are due Tuesday.

These are the main moves in markets: Stocks The S&P 500 Index rose 0.1 per cent as of 4.03 pm New York time, while the Nasdaq Composite Index gained 0.6 per cent and the Dow Jones Industrial Average increased 0.1 per cent.

The Stoxx Europe 600 eased less than 0.1 per cent.

The MSCI Emerging Market Index dropped 0.4 per cent.

The MSCI Asia Pacific Index fell 0.4 per cent, the fourth consecutive decline.

Currencies The Bloomberg Dollar Spot Index rose less than 0.1 per cent.

The euro rose less than 0.1 per cent to US$1.1218 (S$1.5380), while the yen was little changed at 108.57 per USdollar.

The British pound fell 0.4 per cent to US$1.2542.

The MSCI Emerging Markets Currency Index fell 0.1 per cent, the fourth consecutive decline.

Bonds The yield on 10-year Treasuries rose less than 1 basis point to 2.09 per cent.

Germany's 10-year yield rose 1 basis point to negative 0.25 per cent.

Commodities West Texas Intermediate fell 1.2 per cent to US$51.87 a barrel, the first drop in three trading sessions.

Gold dropped 0.2 per cent to US$1,339 an ounce.

The Bloomberg Commodity Index fell less than 0.1 per cent, the first drop in third days.