U.S. Futures Steady Before Jobs Data; Dollar Slips: Markets Wrap

The US dollar index, which tracks the greenback against a basket of six global currencies, marked its lowest level in more than a month on improved risk-taking and a new spending plan by Congress that takes into account the US budget deficit. European stocks rose to a nine-month high, driven by energy stocks that rose in line with rising oil prices.

Stocks in Europe and Asia fell as US index futures rose as investors struggled to interpret the impact of the US jobs data and the Trump administration’s trade policies. Japan’s stock market has fallen to its lowest level in more than a month on worries about China’s economic growth and trade, as Trump’s administration discusses plans to limit China’s “access” to US funding. Reports of the outcome of Brexit trade talks, expected to be concluded over the weekend, sent the region’s benchmark indexes higher, with Frankfurt’s Stoxx 600 up 0.25%, the FTSE 100 up 1.1%, its biggest one-day gain in more than a year, and London’s F TSX 100 gaining 0.83%.

Chinese stocks fell to their lowest level in more than a month on worries about China’s economic growth and trade, while the yuan gained in value.

The companies, which opened in New York, pointed to a strong start to the week when the US released a statement about its plans to discuss new restrictions on China. Hong Kong shares performed better in the first half of the day as traders returned from holidays, and shares on the mainland gained 1.7 per cent.

Government bonds were steady, and Powell’s patience helped ease the selling pressure on them, but the yield on 10-year bonds still ended last week at 1.626%, the highest level since the start of the year and the second highest in more than two years. The fall in the Bloomberg Dollar Index took it to its lowest level since June, while Treasurys remained steady. Oil futures climbed on Monday, helped by a sharp drop in crude inventories, according to the U.S. Energy Department.

The rise put pressure on the US dollar, which has been under pressure in recent weeks from rising US Treasury yields and the fall in oil prices. The dollar index was trading at its lowest level since June and ended April with a loss of 2%, but still above its year-low.

Asian stocks slipped as fears grew that a global coronavirus shutdown could last for months, although markets regained some ground and Australia posted a remarkable jump. US and European futures were up over the day, with EUROSTOXXX 50 futures up 2% and EURSToxxx 40 futures up 1.5%.

Crude oil fell sharply on Friday, US crude briefly fell below $20 and Brent to its lowest level in 18 years, fuelling fears that demand for the fuel could fall further. Moreover, a sharp drop in oil prices in the wake of US wage data weighed too heavily on investor sentiment.

The S & P Sensex slipped 28,440 points today and the market’s broad was in favour of the decline, with 1,347 of the 2,453 companies trading on the benchmark index giving way, while 172 were unchanged. Bajaj Finance emerged as the biggest loser from the index, down 12 per cent, while Tech Mahindra led the way with a 5 per cent fall.

As the number of cases of Zika infections rises to more than 200,000 a day, and California prepares for its worst outbreak since the epidemic began – with deaths and hospitalizations that are turning into pandemics – the outlook for the US economy is becoming increasingly bleak, according to a report.

The data is being closely watched as lawmakers approach a bipartisan compromise on stimulus measures that could inject nearly $1 trillion into the US economy by the end of the year. A sustained strong recovery in the US economy and a strong dollar are at risk, “it said. The data will be watched by investors and policymakers, as well as Federal Reserve monetary policy makers, who will be looking for signs of a return to normal US economic activity.

Friday’s session started positively, with futures contracts tied to the Dow Jones Industrial Average showing a 95-point gain, while S & P 500 futures showed a 10-point rise. Tesla Inc rose on Wednesday to overtake Toyota Motor Corp as the most valuable automaker. U.S. futures rose Thursday after positive vaccine development news and reassuring jobs data later in Washington added to the positive momentum in vaccine development.

Yields on 10-year U.S. Treasuries rose after the document was released, though they gave up much of the move. The June employment report is released after markets closed on Friday for the Fourth of July holiday. Over longer horizons, the government should actually extend the average maturity of the debt to above its historical range, “John Borrowing, chief investment officer of the Federal Reserve Bank of New York, said in an accompanying statement on Wednesday.