By Riva Gold
Markets started the final trading week before Christmas on a subdued note, with stocks mostly lower and the dollar cooling after its best week in a month.
The Stoxx Europe 600 inched down 0.3% in the early minutes of trading, following a mostly downbeat session in Asia. The basic resources sector shed 1.2%, leading declines in Europe, as copper prices fell 0.8% to $5,594 a ton.
Investors were also looking ahead to Germany's Ifo report, a key indicator of business confidence, due later in the morning. Economists expect to see continued stability from November, even as European companies responded to a change of government in Italy and several elections ahead in 2017.
Government bonds and thedollar both stabilized Monday after rising sharply last week, when the U.S. Federal Reserve raised interest rates for the first time in a year and signaled a faster-than-expected pace of rate increases in 2017. The WSJ Dollar Index was last down 0.2%, with the dollar down 0.5% against the yen and 0.1% against the euro.
Yields on 10-year German bunds and U.S. Treasurys inched down very slightly to 0.323% and 2.582% respectively. U.S. Treasury yields had settled at 2.600% on Friday, the highest in over two years, amid expectations of higher interest rates and signs inflation might be starting to creep up. Inflation chips away at bonds' fixed returns over time, reducing their attractiveness to investors.
Earlier, markets in Asia mostly inched lower, with the Shanghai Composite Index off 0.2% as a sharp selloff in Chinese government bonds raised concerns money is exiting the country's capital markets. The Hang Seng Index shed 0.6%, while stocks in Japan were little changed.
Australian stocks advanced 0.4%, as gains in crude oil boosted the energy sector. Brent crude was last up 0.3% at $55.36 a barrel.
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(END) Dow Jones Newswires
December 19, 2016 03:53 ET (08:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.