(Bloomberg) — US stock futures rose slightly and major currencies held to narrow ranges in a cautious start to trading Monday after Treasury yields surged last week on rate-hike bets and shares on Wall Street ended lower Friday.
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Contracts for Asian share benchmarks pointed to a mixed open, with Hong Kong down, Japan up and Australia marginally higher. As worries about the banking sector abate and inflation pressure persists in the US, investors have upped wagers for at least one more interest rate increase from Federal Reserve this year, which is rippling through global markets.
The S&P 500 fell 0.2% Friday, trimming its gain for the week to 0.8%, while The Nasdaq 100 managed to squeeze out a 0.1% gain over the five days, as policy-sensitive technology names like Microsoft Inc. and Apple Inc. dragged on the benchmark. Swaps traders upped bets for a rate increase by June and pricing suggests a quarter point hike has better than three-in-four odds for May.
Looking ahead to this week, investors are awaiting the release of the Fed’s Beige Book and commentary from officials including John Williams, Raphael Bostic, Loretta Mester and Lisa Cook. Markets were rattled last week after Fed Governor Christopher Waller said he favored more policy tightening in the central bank’s battle with inflation.
Much of the focus in Asia will be on China and the strength of its economic recovery. Figures on Tuesday are projected to show gross domestic product expanded 3.9% in the first quarter from a year earlier, well below the government’s target for full-year growth of around 5%. March data may show increases in industrial output, investment and retail sales.
The dollar traded within ranges of about 0.1% versus major peers early Monday after a gauge of greenback strength rose 0.4% last week.
Treasury yields rose Friday, with the rate-sensitive two-year jumping to trade around 4.1%, a weekly high, after a measure of March retail sales showed core readings declined less than estimated and the comments from Fed officials. Yields on government bonds in Australia and New Zealand climbed early Monday.
Financials outperformed last week with JPMorgan Chase & Co. and Citigroup Inc. leading the charge after earnings. Assurances about the sector’s health and an increase in deposits following the March failures of three smaller US lenders drove the big banks higher on Friday.
The sector will remain in the hot seat Monday when Charles Schwab Corp. and State Street Corp. report. Investors will be looking for signs of health from Schwab, which has plunged nearly 40% this year as rising rates drove a spike in unrealized losses at the brokerage. Bank of America Corp. and Goldman Sachs Group Inc. will report later in the week as will Netflix Inc. and Tesla Inc.
While recent data suggested runaway prices were moderating somewhat, a Friday report suggested Americans are pessimistic. Inflation expectations jumped in April with consumers seeing prices climbing 4.6% on an annual basis, up from 3.6% in March, according to a University of Michigan survey.
In commodities, crude was little changed Monday after logging its fourth week of gains amid signs of a tightening global market. Gold was steady after a small decline last week. Bitcoin held above the key $30,000 level.
Key events this week:
ECB President Christine Lagarde speaks at the Council of Foreign Relations in New York, Monday
Fed’s Thomas Barkin speaks before the Richmond Association for Business Economics, Monday
China GDP, retail sales, industrial production, Tuesday
US housing starts, Tuesday
Goldman Sachs and Bank of America release first-quarter earnings, Tuesday
Fed’s Michelle Bowman discusses digital currency, Tuesday
Eurozone CPI, Wednesday
Fed releases Beige Book, Wednesday
Fed’s John Williams gives a speech, Wednesday
Fed’s Austan Goolsbee is interviewed on NPR, Wednesday
China loan prime rates, Thursday
Eurozone consumer confidence, Thursday
US initial jobless claims, existing home sales, index of leading economic indicators, Thursday
ECB issues report on March policy meeting, Thursday
Fed’s Christopher Waller speaks at cryptocurrency-focused event, Thursday
Fed’s Patrick Harker speaks on “monetary policy and housing”, Thursday
Fed’s Loretta Mester discusses the economic and policy outlook, Thursday
Fed’s Raphael Bostic discusses regional and national economic conditions, Thursday
Fed’s Michelle Bowman and Lorie Logan speak at event, Thursday
PMIs for Eurozone, Friday
Japan CPI, Friday
Fed’s Lisa Cook discusses economic research at an event, Friday
Some of the main moves in the market:
Stocks
S&P 500 futures rose 0.2% as of 8:14 a.m. Tokyo time. The S&P 500 fell 0.2% Friday
Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.2%
Hang Seng futures fell 0.6%
S&P/ASX 200 futures rose 0.2%
Nikkei 225 futures rose 0.5%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0987
The Japanese yen was little changed at 133.92 per dollar
The offshore yuan was little changed at 6.8717 per dollar
The Australian dollar was little changed at $0.6705
Cryptocurrencies
Bitcoin was little changed at $30,334.09
Ether was little changed at $2,121.9
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric and Ritika Gupta.
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Source: https://finance.yahoo.com/news/us-stock-futures-rise-currencies-223603867.html