Stocks, US Futures Rise;  Treasury yields up: packing markets

Stocks, US Futures Rise; Treasury yields up: packing markets

(Bloomberg) — Stocks in Asia rose Tuesday and US stock futures pointed higher as investor sentiment stabilized. Treasuries withdrew after reopening a holiday.

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Japanese stocks gained, with Australia and South Korea also in green. Markets are bouncing after the worst decline in global equities last week since 2020.

The decline in Treasuries brought the 10-year benchmark interest rate to approximately 3.28%. Further volatility in bonds, under the Federal Reserve’s intention to make sharp rate hikes to curb inflation, could shake global markets again.

Australian interest rates rose after central bank governor Philip Lowe reiterated that further rate hikes are likely looming.

Investors continue to monitor China’s Covid flare-ups and its efforts to support economic growth. The yen remains near its 24-year low versus the dollar, undermined by the contrast between a super-friendly Bank of Japan and an aggressive Fed.

In commodities, oil gained, while prices for metals such as copper are plagued by worries about the demand outlook amid weakening global growth.

St. Louis Fed President James Bullard warned that US inflation expectations could “come off without credible action from the Fed,” while former Treasury Secretary Lawrence Summers argued that the nation’s unemployment rate could rise above 5% for an extended period of time. have to rise to curb the price pressure. Those comments underscore the perilous backdrop that investors face.

“There could be a story that we’ve bottomed out, we’re oversold, the Fed is taking inflation seriously, and that could be slightly bullish in the meantime,” Frances Stacy, Optimal Capital’s director of strategy, said on Bloomberg TV.

Earlier, European Central Bank President Christine Lagarde reiterated officials’ intention to raise interest rates in July and September, indicating that concerns about financial market tensions are not derailing the fight against inflation.

Elsewhere, Bitcoin held above $20,000 after a turbulent period for cryptocurrencies.

What to watch this week:

  • RBA minutes, Governor Philip Lowe will speak, Tuesday

  • Fed Chair Jerome Powell Semi-Annual Senate Testimony, Wednesday

  • Bank of Japan April Minutes, Wednesday

  • Powell US House Testimony, Thursday

  • First U.S. Unemployment Claims Thursday

  • PMIs for Eurozone, France, Germany, UK, Australia, Thursday

  • ECB Economic Bulletin, Thursday

  • US University of Michigan Consumer Confidence, Friday

  • RBA’s Lowe speaks at panel, Friday

Some of the key moves in markets:

Shares

  • S&P 500 futures rose 1.1% as of 9:30 am in Tokyo

  • Nasdaq 100 futures rose 1.2%

  • Japan’s Topix index rose 1.4%

  • Australian S&P/ASX 200 Index added 0.9%

  • South Korean Kospi index rose 0.6%

currencies

  • The Bloomberg Dollar Spot Index fell 0.1%

  • The euro stood at $1.0527, up 0.2%

  • The Japanese yen was 135.04 per dollar

  • The offshore yuan was 6.6841 per dollar

bonds

Raw materials

  • West Texas Intermediate crude oil rose 1.6% to $111.27 a barrel

  • Gold had changed little at $1,841 an ounce

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