(Bloomberg) — From oil to stocks and currencies, global markets were a picture of relative calm Monday in the wake of a geopolitical shock that challenged Vladimir Putin’s rule in Russia.
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Oil climbed more than 1% after its near 4% slide last week, US equity futures ticker higher and a gauge of dollar strength declined 0.1% while most major currencies traded within narrow ranges versus the greenback.
While events in Russia had the potential to spur investors into selling riskier assets, initial moves were modest and reflected the impact of a deal that was brokered to halt the Wagner mercenary group’s advance toward Moscow. The agreement includes dropping criminal mutiny charges against Yevgeny Prigozhin and his fighters.
“Even though the Prigozhin mutiny may not cause larger market movements directly, this could quickly change depending on how the political situation in Russia unfolds in coming months,” Erik Meyersson, chief emerging-markets strategist at SEB AB, said in a note. “Markets will likely become more sensitive to internal political matters in Russia.”
Contracts for the S&P 500 and the Nasdaq 100 rose about 0.2%, recovering some of the lost ground that saw US stocks notch their worst week since March. Anxiety has been rising in equity markets that central banks will have to ratchet interest rates higher to tamp down inflation, and in the process push the economy into reverse.
Bonds rallied in Australia and New Zealand on Monday, echoing moves in Treasuries Friday.
The S&P 500 Index ended the shortened holiday week 1.4% lower while the Nasdaq 100 benchmark fell 1.3% as investors took profits from the year’s winning technology names. Chipmakers Marvell Technology Inc. and GlobalFoundries Inc. were among Friday’s laggards while drops in Microsoft Corp. and Nvidia Corp. weighed on the gauges.
The second-quarter stock rally — fueled by the frenzy for growth-oriented artificial intelligence stocks — is fraying under the threat of more rate hikes and fears that the full economic impact of aggressive central bank policy has yet to be felt.
Federal Reserve Chair Jerome Powell dampened the mood last week when he said the US may need one or two more rate increases in 2023. Other Fed commentators pushed back against investor hopes for a rate cut this year: “I’d be comfortable with the information I have today, staying right where we are and just staying here through the rest of this year and long into next year,” Atlanta Fed President Raphael Bostic said at an event Friday.
Meanwhile, the US manufacturing purchasing managers index fell to 46.3 in June from 48.4 the prior period, the lowest reading since December.
Economic data from Germany and France ignited fears of a downturn in Europe, spurring Treasuries to take part in a global bond market rally as investors sought safe havens.
Key events this week:
US new home sales, durable goods, Conference Board consumer confidence, Tuesday
ECB President Christine Lagarde speaks at ECB forum in Sintra, Portugal, Tuesday
China industrial profits, Wednesday
US wholesale inventories, goods trade balance, Wednesday
Federal Reserve to unveil results of annual banking industry stress test, Wednesday
Policy panel with ECB’s Christine Lagarde, Fed Chair Jerome Powell, BOJ’s Kazuo Ueda and BOE’s Andrew Bailey at ECB forum in Sintra, Wednesday
Sweden rate decision, Thursday
US GDP, initial jobless claims, Thursday
Atlanta Fed President Rafael Bostic speaks on the US economic outlook at event in Dublin, Thursday
China manufacturing PMI, non-manufacturing PMI, Friday
Eurozone CPI, unemployment, Friday
Japan unemployment, industrial production, Tokyo CPI, Friday
US personal income and spending, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 8:01 a.m. Tokyo time. The S&P 500 fell 0.8% Friday
Nasdaq 100 futures rose 0.2%. The Nasdaq 100 fell 1% Friday
Nikkei 225 futures fell 0.4%
Australia’s S&P/ASX 200 Index futures fell 0.2%
Hang Seng Index futures fell 0.6%
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro rose 0.1% to $1.0905
The Japanese yen rose 0.1% to 143.50 per dollar
The offshore yuan was little changed at 7.2099 per dollar
The Australian dollar was little changed at $0.6681
Cryptocurrencies
Bitcoin rose 0.4% to $30,491.78
Ether rose 0.3% to $1,900.93
Bonds
Commodities
West Texas Intermediate crude rose 1.2% to $70.01 a barrel
Spot gold rose 0.2% to $1,924.23 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Carly Wanna, Isabelle Lee and Matthew Burgess.
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Source: https://finance.yahoo.com/news/oil-us-stock-futures-edge-221420398.html