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US and European stock futures rise; yields dip: markets wrap

The 10-year Treasury yield pulled back under 1.5%, while the dollar was steady.
Image: Kiyoshi Ota/Bloomberg

US and European equity futures climbed Tuesday, while Asian stocks were mixed, as investors mulled this week’s key Federal Reserve meeting. Commodities retreated.

Japanese shares gained, while Australian stocks outperformed after a holiday. Chinese equities declined on concerns about liquidity and as metals prices slid led by copper. Gains in technology shares had pushed the S&P 500 to a record Monday, though three stocks fell for every one that rose. The 10-year Treasury yield pulled back under 1.5%, while the dollar was steady.

Bitcoin continued to gyrate amid a barrage of comments, briefly climbing above $41 000 only to pull back. The digital currency got a boost after veteran hedge fund manager Paul Tudor Jones re-endorsed the coin in a television interview.

Investors are awaiting clues from the Fed about a timetable for scaling back emergency monetary stimulus after a pullback in bond yields eased tapering concerns. Expectations are that the central bank will reaffirm the pace of bond purchases this week, even if it delivers projections for interest-rate liftoff in 2023, according to economists surveyed by Bloomberg. The decision is due Wednesday.

At some point, “brushing inflation worries aside will no longer convince investors, so we’ll continue to pay attention to what the Fed says about its growth, inflation and policy rate expectations,” Marcella Chow, JPMorgan Asset Management global market strategist, said on Bloomberg Television.

Elsewhere, crude oil traded around $71 a barrel. The Australian dollar fluctuated after central bank meeting minutes showed members thought it would be premature to consider ceasing its bond-buying scheme.

Here are some key events to watch this week:

  • An EU-US summit takes place in Brussels on Tuesday
  • Data on US industrial production, producer prices and retail sales come Tuesday
  • The Federal Open Market Committee rate decision comes on Wednesday, with a news conference from Jerome Powell after
  • US President Joe Biden and Russia’s Vladimir Putin meet Wednesday in Geneva
  • US Treasury Secretary Janet Yellen testifies before a House panel Thursday on the federal budget
  • Rate decisions come from Switzerland and Norway on Thursday
  • The Bank of Japan’s monetary policy decision is on Friday

These are some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.2% as of 7 a.m. in London. The S&P 500 rose 0.2% to a record high
  • Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 0.9% to a record high
  • Topix index rose 0.8%
  • Australia’s S&P/ASX 200 Index rose 1%
  • South Korea’s Kospi index was little changed
  • Hang Seng Index fell 0.6%
  • Shanghai Composite Index fell 0.7%
  • Euro Stoxx 50 futures rose 0.4%

Currencies

  • The Japanese yen traded at 110.06 per dollar
  • The offshore yuan was at 6.4047 per dollar
  • The Bloomberg Dollar Spot Index was little changed
  • The euro was at $1.2126

Bonds

  • The yield on 10-year Treasuries fell one basis point to 1.48%
  • Australia’s 10-year yield was steady at 1.50%

Commodities

  • West Texas Intermediate crude rose 0.3% to $71.07 a barrel
  • Gold was at $1,866.78 an ounce
  • LME copper futures fell 2.1%
© 2021 Bloomberg

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