Stable stocks, rise in US futures; Cash slip: contract envelope

(Bloomberg) – Asian stocks were flat and US futures rose as traders weighed in on European Covid brakes and the risk of a faster Federal Reserve cut. The Treasury yield curve was almost the flattest since the start of the pandemic.

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Shares fell in Japan on Monday but rose in South Korea – which benefited from export gains – and China, where the central bank indicated possible easing measures to support a slowing economy. US futures rallied after economically sensitive sectors led the S&P 500 lower on Friday, while the tech-heavy Nasdaq 100 outperformed in response to home-based trading.

T-bills cut a rally and the spread between yields on five-year and 30-year maturities was around the lowest since March 2020. Bonds were bolstered on Friday by risk aversion as the surge in European infections pushed Austria towards a lockdown and prompted Germany to tighten restrictions. The curve flattened in part following signs that the Fed may consider withdrawing more quickly from its bond buying program.

The euro was among the worst performers in the Group of 10 basket, with the yen also falling. Oil has erased the declines as traders wait to see if countries release supplies from strategic reserves. Bitcoin retreated, falling to $ 57,000.

Global equities remain close to all-time highs overall, facing a litany of worries, including a winter wave of rising coronavirus cases and high inflation leading central banks to tighten monetary policy. Other uncertainties include the choice of President Joe Biden as the Fed presidential candidate of Governor Lael Brainard and outgoing President Jerome Powell, as well as the perennial saga of suspending or lifting the US debt limit. .

A trio of Fed policymakers – Vice President Richard Clarida, Governor Christopher Waller and St. Louis Federal Reserve Chairman James Bullard – have signaled that the subject of a faster cut could be on. the table when the Federal Open Market Committee meets in December.

“What we’ll probably see this week is more Fed members socializing this idea of ​​a faster QE slowdown,” Jason Schenker, president and chief economist of Prestige Economics, said on Bloomberg Television. “If this idea spreads and is emphasized repeatedly, it will increase the likelihood that the reduction announced in December will be faster than the pace announced in early November.”

Meanwhile, the tension between Russia and Ukraine continues. U.S. intelligence has detected a build-up of Russian troops and artillery to prepare for a rapid and large-scale surge into Ukraine from several locations if President Vladimir Putin decides to invade, according to people familiar with them. conversations.

For more market analysis, read our MLIV blog.

Here are some key events from this week:

  • PMI data for the euro zone and the United States on Tuesday

  • Reserve Bank of New Zealand rate decision Wednesday

  • US FOMC minutes, consumer income, wholesale stocks, new home sales, GDP, initial jobless claims, US durable goods, University of Michigan consumer sentiment. Every Wednesday

  • Bank of Korea policy decision Thursday

  • Thanksgiving in the United States: US stocks and bond markets closed on Thursday

  • Bank of England Governor Andrew Bailey chats with Mohamed El Erian at a Cambridge Union event. Thursday

Some of the main movements in the markets:

Actions

  • S&P 500 futures rose 0.3% at 1:03 p.m. in Tokyo. The S&P 500 fell 0.1%

  • Futures on the Nasdaq 100 rose 0.3%. The Nasdaq 100 rose 0.6%

  • Japan’s Topix index fell 0.2%

  • Australian S & P / ASX 200 index fell 0.4%

  • South Korea’s Kospi index rose 1.3%

  • Hong Kong’s Hang Seng Index lost 0.4%

  • China’s Shanghai Composite Index rose 0.7%

  • Euro Stoxx 50 futures soar 0.2%

Currencies

  • The Japanese yen was at 114.14 per dollar, down 0.1%

  • The offshore yuan was trading at 6.3854 per dollar, up 0.1%

  • Bloomberg Dollar Spot Index is stable

  • The euro was at $ 1.1271, down 0.2%

Obligations

Merchandise

  • West Texas Intermediate crude rose 0.1% to $ 75.98 a barrel

  • Gold was at $ 1,847.98 an ounce

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