(Bloomberg) — European and U.S. stock futures edged lower as investors braced for the full range of economic data and remarks from Federal Reserve speakers in the coming days that will help determine the outlook for interest rates. . Japan's two-year bond yield has risen to its highest level in more than a decade.
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Futures contracts pointed to further stock losses after the S&P 500 index fell for the first time in four days on Monday ahead of this week's data, including the Federal Reserve's preferred inflation measure to be released on Thursday. Asian stocks were mixed, but Chinese stocks rose, led mainly by tech companies.
Japan's two-year bond yield rose to its highest level since 2011 as stronger-than-expected inflation data increased expectations that the central bank will end its negative interest rate policy in the coming months. Traders increased the probability that the Bank of Japan will end its negative interest rate policy by April to about 82% from 78% on Monday, according to swaps data compiled by Bloomberg. The yen rose against the dollar.
Kazuya Fujiwara, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities, said the inflation reports “increased speculation that the Bank of Japan will end its negative interest rate policy as early as March, which has triggered a sell-off in bonds.” Stated. Tokyo. He said the statistics confirm that inflationary pressures persist.
Asian equity benchmarks are heading for monthly gains, led by gains in Japanese and Chinese markets. However, there is still a lot of uncertainty in the market around factors such as the potential for Fed rate cuts, the possibility of further support from China, and whether stock valuations are attractive enough to support further gains.
“Our sense is that the overall valuation is fair,” Sunil Khur, a strategist at Goldman Sachs Group Inc., told Bloomberg TV. From here, “it's the underlying profit offering that will move the market. This year he plans for 15% profit growth in the region,” he said.
Read more: BlackRock, Amundi expect Japanese stocks to continue rising
Chinese state-backed funds have poured more than 410 billion yuan ($57 billion) into domestic stocks this year to support the market, UBS Group estimates. The Swiss bank based its calculations on “excess” trading in 54 Chinese exchange-traded funds.
Fast fashion company Shein is considering the possibility of changing its initial public offering from New York to London due to hurdles in listing in the United States, according to people familiar with the matter. Shein was founded in China and is currently headquartered in Singapore.
Read more: Debt-ridden companies seek equity capital as interest costs soar
In Asia, U.S. Treasuries edged lower on Monday due to heavy corporate bond issuance and two government bond auctions.
Wall Street will be watching to see how bond markets absorb large amounts of Treasury and corporate sales in month-end positioning. Blue-chip U.S. companies sold a record $172 billion in corporate bonds in February as they scrambled to capture investor demand as borrowing costs fell.
Elsewhere, Bitcoin briefly surpassed the $57,000 level for the first time since late 2021, supported by investor demand through exchange-traded funds (ETFs) and additional purchases by MicroStrategy.
In commodities, global benchmark Brent crude rose on Monday to trade above $82 a barrel, while gold rose for two weeks as markets wait for further clues about when the Fed will start cutting rates. The price has stabilized around the highest price for the first time in a while.
This week's main events:
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BOE Governor Andrew Bailey speaks on Tuesday
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US Conference Consumer Confidence Index, Durable Goods, Tuesday
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Michigan Republican and Democratic presidential primaries Tuesday
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Reserve Bank of New Zealand policy decisions Wednesday
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Eurozone economic confidence, consumer confidence, Wednesday
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US wholesale inventories, GDP, Wednesday
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Fed's Rafael Bostic, Susan Collins and John Williams speak on Wednesday
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G20 finance ministers and central bank chiefs will meet in Sao Paulo from Wednesday to Thursday
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German CPI, unemployment rate, Thursday
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US Consumer Income, PCE Deflator, New Unemployment Insurance Claims, Thursday
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Fed's Austan Goolsby, Raphael Bostic and Loretta Mester speak Thursday
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China official PMI, Caixin manufacturing PMI, Friday
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Eurozone S&P World Manufacturing PMI, CPI, Unemployment Rate, Friday
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BOE Chief Economist Hugh Pill speaks on Friday
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US Construction Spending, ISM Manufacturing, University of Michigan Consumer Sentiment, Friday
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Fed's Rafael Bostic and Mary Daly speak on Friday
The main movements in the market are:
stock
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As of 6:25 a.m. London time, S&P 500 futures were down 0.1%.
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Nasdaq 100 futures fell 0.2%
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Nikkei 225 futures (OSE) rose 0.1%
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S&P/Australian Stock Exchange 200 futures little changed
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Hong Kong's Hang Seng fell 0.1%
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The Shanghai Composite rose 0.7%.
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Euro Stoxx50 futures fell 0.2%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0848.
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The Japanese yen rose 0.1% to 150.50 yen to the dollar.
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The offshore yuan was almost unchanged at 7.2108 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6546.
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The British pound was almost unchanged at $1.2679.
cryptocurrency
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Bitcoin rose 3% to $56,269.43
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Ether rose 1.3% to $3,228.1
bond
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The 10-year government bond yield was almost unchanged at 4.28%.
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Japan's 10-year bond yield remains unchanged at 0.685%
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The Australian 10-year bond yield rose 3 basis points to 4.13%.
merchandise
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West Texas Intermediate crude rose 0.2% to $77.77 per barrel.
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Spot gold rose 0.1% to $2,033.85 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jason Scott.
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