U.S. and European futures decline; Dollar Rises With Yields: Markets Wrap

(Bloomberg) — U.S. and European stock futures fell along with Asian stocks on Tuesday as investors weighed in on the prospect of central banks tightening policy more than previously expected to tame inflation.

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The dollar rose against other currencies in the G-10 basket, as Treasury yields rose in Asia after trading was closed due to a holiday in the United States on Monday.

S&P 500 and Nasdaq 100 futures lost more than 0.3%, indicating more downward pressure for US stocks after last week’s declines.

The MSCI Asian Index fell 0.7%, with Hong Kong-listed technology stocks leading the decliners. Shares of HSBC Holdings Plc fell even after the company beat earnings expectations in its fourth-quarter results.

Stocks in mainland China were volatile after the CSI 300 index posted its best one-day gain since November on Monday, when Goldman Sachs Group Inc. Strategists said stocks in the country could rise by about a fifth from current levels this year.

Japan’s 10-year yield briefly rose above the central bank’s yield curve control target by 0.5% for the first time since January. Investors are preparing to hear from Kazuo Ueda, the candidate for governor of the Bank of Japan, who is set to face hearings in parliament on Friday.

The yield on the policy-sensitive two-year US Treasuries was near the highest level since November as traders await the release of the PCE deflationary index, the Fed’s preferred measure of inflation, later this week.

“While some will focus on US-China relations and point to upcoming meetings between the Chinese and Russians this week, repricing and pushing interest rate expectations higher will ultimately open up the downside in equity markets,” said Chris Weston, head of research at Pepperstone Group Ltd. , on a note.

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Record two-year yields on New Zealand government bonds rose on Tuesday while Australian yields rose. Economists expect the Reserve Bank of New Zealand to raise interest rates by 50 basis points on Wednesday.

Meanwhile, Chuck Comelo, president and chief executive officer of Essex Financial Services, said in Bloomberg that the economic data released so far “definitely puts a lot of cold water” on the argument that the Fed could stop or cut interest rates soon. radio. “We’re on a more volatile path and I think the market is finally waking up to rates that are going to stay higher for a while longer,” he said.

Elsewhere, oil traded in choppy as investors weighed the possibility of further monetary tightening against signs of improving demand from China. Gold hasn’t changed a bit.

Main events this week:

• Earnings for the week are set to include: Alibaba, Anglo American, AXA, BAE Systems, Baidu, BASF, Danone, Deutsche Telekom, Holcim, Home Depot, Hong Kong Exchanges & Clearing, Iberdrola, Lloyds Banking Group, Moderna, Munich Re, Newmont, Nvidia, Rio Tinto, Walmart, Warner Bros. Discovery

• PMIs for Japan, the Eurozone, the United Kingdom and the United States on Tuesday

• Existing home sales in the US, Tuesday

• US mortgage applications, Wed

• Federal Reserve minutes from January. 31-Feb. One political meeting, Wed

• Eurozone CPI, Thursday

• US GDP, Initial Jobless Claims, Thursday

• Atlanta Federal Reserve Chairman Raphael Bostick speaking Thursday

• G20 finance ministers and central bank governors meet in India, from Thursday to Friday

• Japanese CPI, Friday

• Bank of Japan governor nominee Kazuo Ueda appears before Japan’s House of Representatives on Friday

Some of the major moves in the markets as of 6:47 AM London time:

Stores

• S&P 500 futures fell 0.4%.

• Japan’s Topix fell 0.1%.

• Hong Kong’s Hang Seng fell 1.3%.

• The Shanghai Composite Index rose 0.4%.

• Futures on the Euro Stoxx 50 fell 0.2%.

currencies

• The Bloomberg Spot Dollar Index rose 0.1%.

• The euro fell 0.1 percent to $1.0671

• The Japanese yen fell 0.2 percent to 134.46 per dollar

• The offshore yuan fell 0.2 percent to 6.8760 per dollar

• The British pound fell 0.1 percent to $1.2027

Digital currencies

• Bitcoin rose 0.8% to $24,975.46

• Ether rose 0.1% to $1,703.22

bonds

• The yield on the 10-year Treasury note advanced three basis points to 3.85%.

• The yield on 10-year Japanese bonds was little changed at 0.50%.

• The yield on the 10-year Australian Treasury note was little changed at 3.81%.

goods

• WTI hasn’t changed much

• Spot gold fell 0.1 percent to $1,838.69 an ounce

This story was produced with help from Bloomberg Automation.

– Assistance from Akshay Chinchalkar.

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