U.S. Stock Futures Churn Higher as Dollar Steadies: Markets Wrap

(Bloomberg) -- Global stock markets stabilized after Monday’s losses, with investors feeling confident enough in the economic recovery and vaccine rollout to buy the dip in some risk assets.

U.S. equity futures were slightly higher, while Europe’s Stoxx 600 Index traded little changed. Commodity prices rose as the dollar held steady and benchmark Treasury yields ticked higher. After Bitcoin suffered steep declines on Monday, the largest cryptocurrency bounced back above $35,000.

The mood across markets was mildly positive as investors assess how the rise in Treasury yields changes the financial landscape. While progress on a vaccine gives reason to be hopeful, there are lingering concerns over the speculative excess and froth that’s driven stock markets to all-time highs in the middle of a pandemic.

“Stocks are fading the bad news,” said Sebastien Galy, a senior strategist at Nordea Investment Funds. “What we are seeing is a feedback loop from higher expected fiscal spending feeding into higher U.S. Treasury yields, which translated into the fear that the price of risk is increasing. But there is realization that if this process is getting too fast, the Fed is likely to step in.”

Among European stock movers, Zur Rose Group AG, a Swiss drug retailer, jumped 15%. Bank of America Corp. initiated the company with a buy recommendation, calling it among the “most compelling” online equity stories in Europe.

In Asia, China’s CSI 300 Index rallied to a 13-year high, driven by a surge in financial and securities stocks. The yuan reached the highest since 2018 versus a basket of trading partners’ currencies on upbeat growth prospects.

Malaysia’s stock benchmark slipped as much as 1.6% after the nation’s king declared a state of emergency until August.

Here are some key events coming up:

These are some of the main moves in markets:

Stocks

• Futures on the S&P 500 Index gained 0.1% as of 1:28 p.m. London time.
• The Stoxx Europe 600 Index dipped 0.1%.
• The MSCI Asia Pacific Index rose 0.2%.
• The MSCI Emerging Market Index climbed 0.3%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1% to 1,125.80.
• The euro was little changed at $1.2152.
• The British pound climbed 0.5% to $1.3592.
• The Japanese yen was unchanged at 104.25 per dollar.

Bonds

• The yield on 10-year Treasuries gained two basis points to 1.17%.
• The yield on two-year Treasuries increased less than one basis point to 0.15%.
• Germany’s 10-year yield rose two basis points to -0.47%.
• Britain’s 10-year yield climbed three basis points to 0.345%.

Commodities

• West Texas Intermediate crude gained 1.3% to $52.87 a barrel.
• Gold strengthened 0.3% to $1,849.97 an ounce.

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