(Bloomberg) — European and US equity futures traded higher alongside the dollar while Chinese stocks and the offshore yuan fell following an inflation warning from China’s central bank.
Most Read from Bloomberg
The muted gains for European and US contracts mirrored small advances for Japanese and Australian shares in mixed Asian trade on Thursday.
The MSCI AC Asia Pacific Index fell as much as 1.3% as Hong Kong and mainland stocks dropped, led by tech shares. The selling also came after Tencent Holdings Ltd. pledged to distribute $20 billion of stock in meal delivery giant Meituan.
Separately, Chinese regulators asked banks to report on liquidity after a bond slump. The offshore yuan fell to the lowest against the dollar.
Treasury 10-year yields edged higher after dropping on Wednesday amid indications from Federal Reserve officials that policy would tighten policy further. A closely watched section of the US yield curve remained near levels not seen in four decades — a sign of investor concern about the world’s biggest economy.
The biggest increase in eight months for US retail sales outpaced estimates and indicated Fed tightening has further to run to stymie inflation. San Francisco Fed President Mary Daly said a pause in rate hikes was “off the table,” and New York Fed President John Williams said the central bank should avoid incorporating financial stability risks into its considerations.
Goldman Sachs Group Inc. increased its forecast for peak US interest rates to 5.25% at the top of the range, up from the previous call 5%.
“Every time equity and bond markets are thinking the Fed is done and start taking off in a rally, the Fed gets out and starts talking that back down again,” Cheryl Smith, economist and portfolio manager for Trillium Asset Management, said on Bloomberg Television.
Oil extended losses as investors shifted their focus back to concerns over the demand outlook after geopolitical tensions eased.
Gold declined in Asia as expectations of a hawkish Fed outweighed hopes of an imminent moderation in rate hikes.
Key events this week:
-
Eurozone CPI, Thursday
-
US housing starts, initial jobless claims, Thursday
-
Fed’s Neel Kashkari, Loretta Mester speak, Thursday
-
US Conference Board leading index, existing home sales, Friday
Some of the main moves in markets:
Stocks
-
Futures on the S&P 500 rose 0.4% as of 7:04 a.m. London time. The S&P 500 fell 0.8%
-
Nasdaq 100 futures rose 0.5%. The Nasdaq 100 fell 1.5%
-
Euro Stoxx 50 futures rose 0.3%
-
The Topix Index rose 0.2%
-
Australia’s S&P/ASX 200 Index rose 0.2%
-
The Hang Seng Index fell 1%
-
The Shanghai Composite Index fell 0.2%
Currencies
-
The Bloomberg Dollar Spot Index rose 0.2%
-
The euro fell 0.1% to $1.0380
-
The Japanese yen was little changed at 139.46 per dollar
-
The offshore yuan fell 0.3% to 7.1315 per dollar
Cryptocurrencies
-
Bitcoin rose 0.3% to $16,580.5
-
Ether fell 0.5% to $1,200.09
Bonds
Commodities
-
West Texas Intermediate crude fell 0.9% to $84.79 a barrel
-
Spot gold fell 0.3% to $1,768.03 an ounce
This story was produced with the assistance of Bloomberg Automation.
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.
