U.S. equities followed European shares lower as investors marked time before key central bank meetings in the coming days. The dollar was steady and Treasuries erased earlier gains on Tuesday.
The three main U.S. indexes opened with modest declines. The Stoxx Europe 600 Index dropped a second day, led by food and beverage and health-care shares. The pound fluctuated as embattled British Prime Minister Boris Johnson insisted he won’t ask for another Brexit delay, while U.K. wage and unemployment data beat estimates.
Most euro-zone sovereign bonds nudged lower as European Central Bank officials prepare to meet. Treasuries added to declines from Monday.
The recent pullback in the bond rally “is a correction to an outsized move in yields during August, not a turn in the trend,” Kit Juckes, chief global FX strategist at Societe Generale SA, wrote in his daily note. “Last Friday’s U.S. labor market data show, clearly enough for me, that the U.S. economy is slowing slowly but steadily as the global trade slowdown infects it.”
Investors are awaiting the ECB’s policy decisions on Thursday and those next week by the Federal Reserve and Bank of England as they assess how much monetary easing may be looming. On the foreign-trade front, China removed one more hurdle for foreign investment into its capital markets on Tuesday.
Elsewhere, oil extended gains to the highest level in almost six weeks as Saudi Arabia’s new energy minister signaled his commitment to production cuts ahead of an OPEC+ meeting later this week.