Stocks, Futures Retreat With Rate Outlook in Focus:
An index of Asian equities fell, ending a two-day winning streak. The rapid spread of Covid cases in China added to concern, with Hong Kong’s Hang Seng Index down about 2%. The drop in European and US futures followed a late-day slide on Wall Street on Friday, with the S&P 500 closing near the day’s lows.
The dollar gained versus all of its Group-of-10 counterparts, while the Treasury 10-year yield eased after a jump on Friday that took it to just below 3.6%. Yields for government bonds in Australia and New Zealand rose.
Recession fears have resurfaced ahead of the Fed decision Wednesday, when policy makers are expected to downshift to a 50 basis points hike. Yet officials including Chair Jerome Powell have also stressed that borrowing costs will need to remain restrictive for some time, putting them at odds with some investors looking for rate cuts later in 2023.
The ECB follows on Thursday, with consensus estimates for it to also deliver a 50 basis points hike. Markets also have to contend with decisions this week from the Bank of England and monetary authorities in Mexico, Norway, the Philippines, Switzerland and Taiwan.
Stocks
S&P 500 futures fell less than 0.1% as of 6:48 a.m. London time. The S&P 500 fell 0.7% Friday
Nasdaq 100 futures fell about 0.1%. The Nasdaq 100 fell 0.6% on Friday
Euro Stoxx 50 futures fell 0.5%
Japan’s Topix index fell 0.2%
Hong Kong’s Hang Seng Index fell 2%
China’s Shanghai Composite Index fell 0.9%
Australia’s S&P/ASX 200 Index fell 0.5%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.1% to $1.0526
The Japanese yen fell 0.2% to 136.88 per dollar
The offshore yuan fell 0.2% to 6.9765 per dollar
The British pound fell 0.2% to $1.2236
Cryptocurrencies
Bitcoin fell 1% to $16,940.75
Ether fell 1.4% to $1,246.94
Bonds
The yield on 10-year Treasuries declined three basis points to 3.55%
Australia’s 10-year yield advanced nine basis points to 3.38%
Commodities
West Texas Intermediate crude rose 1% to $71.75 a barrel
Spot gold fell 0.5% to $1,788.97 an ounce
Source : Bloomberg