Stocks drift as dollar rally pauses

SYDNEY • Stocks treaded water as investors awaited the next catalyst, with central bankers including Mario Draghi due to speak yesterday and a deadline on Catalonia’s independence claim from Spain looming. Oil extended gains as signs of declining US stockpiles pointed to healthy demand.

The Stoxx Europe 600 Index was little changed after mixed trading in Asian equities earlier, despite fresh records for US stocks. The dollar was steady with traders continuing to focus on speculation about the next US Federal Reserve (Fed) chief, as volatility in major currencies fell to a three-month low.

The pound extended a decline as investors questioned the Bank of England’s commitment to raise interest rates following testimony on Tuesday from policymakers including governor Mark Carney.

US President Donald Trump’s choice for the next chair of the Fed will be unveiled before he leaves on Nov 3 for an 11-day trip to Asia and Hawaii, a person familiar with the process said on Tuesday. John Taylor was said to have impressed Trump in an interview, buoying gains in the greenback earlier this week given the assumption by many that he would favour tighter policy. Trump also tried to rally support for his tax plan in a speech on Tuesday.

The euro was steady after Tuesday’s slide, sparked by Spain’s downward revision of growth forecasts as cost of the Catalan crisis becomes apparent. Catalonia has until today to back down from a challenge to secede.

Stocks in Shanghai gained after Chinese President Xi Jinping laid out a road map to turn the country into a leading global power by 2050.

Japan’s Topix Index closed less than 0.1% higher in Tokyo. Australia’s S&P/ASX 500 Index ended flat, while South Korea’s Kospi Index was also little changed.

Hong Kong’s Hang Seng Index inched lower, while the Shanghai Composite Index was up 0.1%.

The MSCI Asia Pacific Index was little changed as was the MSCI Emerging Market Index after dropping 0.5% in the previous session.

The Stoxx Europe 600 Index gained 0.1% as of 8:27am London time yesterday. The UK’s FTSE 100 Index climbed 0.2%. Germany’s DAX Index dipped 0.1%, the first retreat in a week and the biggest decrease in more than a week.

The Bloomberg Dollar Spot Index decreased less than 0.05%. — Bloomberg