Futures Edge Up With Europe Stocks; Oil Steady: Markets Wrap

U.S. futures and European stocks climbed, with investors focused on the strength of the global economic recovery and progress in delivering vaccines.

American Airlines Group Inc. and Carnival Corp. rose in pre-market trading. U.S. Steel Corp. advanced after saying it expects earnings to improve on the back of strong market conditions. Travel companies and automakers led the Stoxx 600 Index to the highest level in a year. Danone, the world’s largest yogurt maker, jumped 5% after announcing it would replace its chairman.

Brent crude hovered around $69 a barrel as economic data from China showed a surge in industrial output, underscoring the strength of its V-shaped recovery. Concerns about tightening liquidity weighed on Chinese shares, with the CSI 300 Index closing down 2.2%.

Treasury market's five-year gauge of inflation is outpacing peers

Investors remain preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares. The benchmark Treasury yield hovered around 1.62% on Monday.

While valuations across equities and credit are elevated, it’s hard not to be positive on risk assets, though “the change of pace in markets last week maybe also suggests a lot is priced already,” Patrik Schowitz, global multi-asset strategist at JPMorgan Asset Management, said in a note.

In the U.S., investors are also considering the potential impact of higher taxes and how that could affect corporate profit growth. President Joe Biden is planning the first major federal tax hike since 1993 to help pay for a long-term economic program, according to people familiar with the matter. The White House is expected to propose a suite of tax increases, mostly mirroring Biden’s 2020 campaign proposals, according to four people familiar with the discussions.

In an interview on Sunday, Treasury Secretary Janet Yellen sought to assauge concerns about inflation, saying the risks remain subdued.

“Is there a risk of inflation? I think there’s a small risk and I think it’s manageable,” Yellen said on ABC’s “This Week” on Sunday. Some prices that fell last year when the Covid-19 pandemic spread across the U.S. will recover, “but that’s a temporary movement in prices,” she said.

Elsewhere, Bitcoin pulled back after a weekend rally that sent prices above $61,000 for the first time. The largest cryptocurrency was trading at about $56,400 on Monday.

These are some key events this week:

Fed Chair Jerome Powell will likely reaffirm his no-tightening policy stance at the Fed policy meeting Wednesday.

Bank of England rate decision Thursday. BOE is expected to leave monetary policy unchanged.

Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index increased 0.1% as of 7:39 a.m. New York time.

The Stoxx Europe 600 Index gained 0.4%.

The MSCI Asia Pacific Index fell 0.1%.

The MSCI Emerging Market Index fell 0.4%.

Currencies

The Bloomberg Dollar Spot Index increased 0.1%.

The euro sank 0.2% to $1.1929.

The British pound was little changed at $1.392.

The onshore yuan strengthened 0.1% to 6.504 per dollar.

The Japanese yen weakened 0.1% to 109.13 per dollar.

Bonds

The yield on 10-year Treasuries increased one basis point to 1.63%.

The yield on two-year Treasuries gained one basis point to 0.16%.

Germany’s 10-year yield was unchanged at -0.31%.

Britain’s 10-year yield jumped two basis points to 0.839%.

Japan’s 10-year yield fell one basis point to 0.111%.

Commodities

West Texas Intermediate crude declined 0.2% to $65.50 a barrel.

Brent crude decreased 0.1% to $69.12 a barrel.

Gold strengthened 0.1% to $1,729.67 an ounce.

Source:-https://www.bloomberg.com/news/articles/2021-03-14/stocks-in-asia-to-open-steady-with-yields-in-focus-markets-wrap

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