(Bloomberg) — Asian stocks and US equity futures made small gains while major currencies traded in narrow ranges in cautious trading early Monday as investors await interest rate decisions this week from the US, Europe, China and Japan. Treasuries were little changed.
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Japan’s Topix index added 0.5%, South Korea’s benchmark edged up by 0.1% and contracts for Hong Kong pointed to a small drop. Australian markets were closed for a holiday. Futures for the S&P 500 crept up by 0.1% after the underlying gauge inched further into bull-market territory on Friday.
Technology shares have continued to climb amid bets the Federal Reserve is nearing the end of its hiking cycle. Positioning in rates markets suggests one more hike, with the likelihood that the move comes next month rather than this Wednesday.
Yet there is also concern that the Fed’s ten hikes have done damage, which has bond managers including Fidelity International to Allianz Global Investors forecasting an economic downturn. Meanwhile, unexpected hikes last week from the Bank of Canada and the Reserve Bank of Australia have added an extra element of uncertainty.
The European Central Bank is projected to lift its benchmark rate Thursday, there’s an outside chance of China cutting its medium-term lending facility the same day and the Bank of Japan is expected to stand pat on Friday.
Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management, cautioned against assuming the recent upswing in equities can gain momentum after the S&P 500 already rose 20% from its recent low.
“While many investors believe that passing this milestone puts markets in bull territory, it remains possible that we are seeing a bear market rally — a period of strong gains that occurs in the middle of a bear market,” she said. “Until markets reach a new all-time high, it’s impossible to know whether the bear market trough —the ultimate low of the market cycle — is behind us.”
In currency markets Monday, the dollar was little changed versus the yen, the euro and the offshore yuan.
Treasury yields were little changed after rising Friday following disappointing employment data from Canada. The country’s economy ended its eight-month run of employment gains with minor job losses in May, signaling weakness in the labor market.
Oil held losses amid persistent concerns around the demand outlook as Goldman Sachs Group Inc. cut its price forecast again. Brent futures traded below $75 a barrel and West Texas Intermediate was below $70.
Key events this week:
US CPI, Tuesday
FOMC begins two-day meeting, Tuesday
Eurozone industrial production, Wednesday
US PPI, Wednesday
FOMC rate decision, Wednesday
IEA oil market report released, Wednesday
China central bank meeting to decide on one-year policy loan rate, Thursday
China property prices, retail sales, industrial production, Thursday
ECB rate decision, Thursday
US initial jobless claims, retail sales, empire manufacturing, business inventories, industrial production
Eurozone CPI, Friday
Japan BOJ rate decision, Friday
US University of Michigan consumer sentiment, Friday
Stocks
S&P 500 futures rose 0.1% as of 8:16 a.m. Tokyo time. The S&P 500 rose 0.1% Friday
Nasdaq 100 futures rose 0.2%. The Nasdaq 100 rose 0.3% Friday
Euro Stoxx 50 futures rose 0.3%
Japan’s Topix rose 0.5%
South Korea’s Kospi rose 0.1%
Hang Seng Index futures fell 0.1%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0748
The Japanese yen was little changed at 139.29 per dollar
The offshore yuan was little changed at 7.1459 per dollar
The Australian dollar was little changed at $0.6741
Cryptocurrencies
Bitcoin fell 0.7% to $25,942.65
Ether fell 1.1% to $1,751.07
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Carly Wanna and Isabelle Lee.
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Source: https://finance.yahoo.com/news/cautious-open-asia-traders-eye-223207705.html