U.S. Futures Fall, Asia Stocks Set for Choppy Open: Markets Wrap

(Bloomberg) — U.S. equity futures retreated and stocks looked set for a choppy start Monday amid worries about high inflation and as investors await Chinese trade data that may show the economic toll of Covid lockdowns.

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Contracts fell for Japan and Australia, while Hong Kong is shut for a holiday. Shares and bonds are coming off their fifth straight weekly drop, hampered by sharply tighter monetary policy and signs of a stagflation-like backdrop.

Commodity-market disruption stemming from Russia’s war in Ukraine continues to sustain price pressures. In the latest developments, the Group of Seven most-industrialized countries pledged to ban the import of Russian oil.

The European Union is working on a similar plan but Hungary remains a holdout and the bloc’s talks are set to continue. Oil fluctuated near $110 per barrel.

Treasury yields, meanwhile, are in sight of levels last seen in 2018 and inflation data this week from the U.S. and elsewhere could drive bond-market swings. The dollar gained versus key peers in early trading in a sign of investor wariness.

Growth, inflation and war risks are providing investors will little respite. Later Monday, President Vladimir Putin is due to speak at Russia’s May 9 Victory Day parade, which marks the anniversary of Nazi Germany’s surrender in 1945. He may indicate his next steps for the Ukraine invasion.

The short-term outlook for the stock market “is still messy and there may be more downside as markets worry about a significant economic slowdown or ‘hard landing’ and aggressive interest-rate hikes,” Diana Mousina, senior economist at AMP Investments, wrote in a note.

The upcoming Chinese data may show that export growth slowed to its weakest pace since June 2020, while imports probably contracted for a second month. Premier Li Keqiang warned of a “complicated and grave” employment situation as Beijing and Shanghai tightened Covid curbs.

Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.8% as of 7:12 a.m. in Tokyo. The S&P 500 fell 0.6% Friday
Nasdaq 100 futures slid 0.9%. The Nasdaq 100 fell 1.2% Friday
Nikkei 225 futures lost 0.9%
S&P/ASX 200 index futures shed 0.7%

Currencies

The Bloomberg Dollar Spot Index rose 0.2% Friday
The euro was at $1.0539, down 0.1%
The Japanese yen was at 130.72 per dollar, down 0.1%
The offshore yuan was at 6.7100 per dollar, up 0.1%

Bonds

Commodities

West Texas Intermediate crude fell 0.3% at $109.49 a barrel
Gold was at $1,885.22 an ounce