Wednesday 08:30 BST. Global stock markets are mixed and US government bond yields are nudging higher as oil prices stabilise and traders welcome easing signs of stress in the European banking sector.
The US dollar is a touch firmer, contributing to gold dipping 0.3 per cent to $1,324 an ounce.
After the FTSE Asia Pacific index shed 0.8 per cent, US index futures suggest the S&P 500 will add 3 points to 2,163 when the opening bell rings later in New York.
Following a choppy session on Tuesday, the Wall Street barometer finished with a 14-point gain and this is helping underpin European stocks on Wednesday.
The pan-European Stoxx 600 is up 1 per cent as the energy market appears to stabilise. The European Oil & Gas producers index is adding 1.2 per cent as Brent, the international crude benchmark, climbs 0.2 per cent to $46.05 a barrel and West Texas Intermediate, the US contract, adds 0.2 per cent to $44.74.
Oil prices have been very volatile this week — jumping 3.2 per cent on Monday and then dropping 2.9 per cent in the previous session — as traders had hopes dashed that major producing nations meeting in Algeria might reach a deal to cut output.
Also supporting broader market sentiment are calmer conditions in the recently hard hit banking sector. Shares in Deutsche Bank, whose fall this week to record lows amid worries about its capital position revived concerns about financials more broadly, are recovering 2.9 per cent.
Stress in the banking sector — which contributed to German Landesbank NordLB postponing a bond sale this week — had encouraged investors to seek the perceived safety of sovereign debt.
German government 10-year Bund yields, which move inversely to the price, fell to a 10-week low of minus 0.16 per cent at one stage on Tuesday, and are currently 0.15 per cent.
Helping to keep yields in negative territory is the uber-accommodative monetary policy of the European Central Bank, and its president Mario Draghi is due to meet German lawmakers on Wednesday to discuss his strategy.
US 10-year Treasury yields are up 1bp to 1.57 per cent, a sign perhaps that risk appetite is stabilising. Futures markets are placing a 50/50 chance on the Federal Reserve raising interest rates by 25 basis points at its December meeting.
Fed chair Janet Yellen is due later on Wednesday to appear before the House Financial Services Committee to comment on supervision and regulation, and the dollar index (DXY), which measures the buck against a basket of its peers, is up 0.2 per cent to 95.62.
The Mexican peso — off 0.1 per cent to 19.4060 pesos per dollar — is giving back a small part of Tuesday’s big gains which came as traders bet that Hillary Clinton shaded the first presidential debate with Donald Trump.
Supporting the DXY is a 0.3 per cent pullback for the Japanese yen to ¥100.69 per dollar, though that was not enough to help the exporter-sensitive Tokyo stock markets. The Topix index shed 1.4 per cent, with a substantial portion of its decline due to a big batch of shares going ex-dividend.
Australia’s S&P/ASX 200 pared early gains to finish just 0.1 per cent higher, with the energy sector the worst performer as stocks reacted to oil’s overnight slide.
Hong Kong’s Hang Seng index was down 0.1 per cent, while on the Chinese mainland the Shanghai Composite lost 0.3 per cent as trading started to wane ahead of the week-long National Day break that begins on October 1.
Additional reporting by Hudson Lockett in Hong Kong
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