Stocks Mixed Ahead This Week’s Key Rate Decisions: Markets Wrap

(Bloomberg) – U.S. and European stock futures rose Monday while Asian stocks were mixed as investors awaited interest rate decisions this week from the United States, Europe, China and Japan. The dollar’s strength gauge was flat and Treasury yields were little changed.

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Euro Stoxx 50 futures rose 0.4% and S&P 500 rose 0.1% after the benchmark crept into bull market territory on Friday. Japan’s Topix rose 0.5%, while Hong Kong’s benchmark index fell 0.1% and markets in Australia were closed for a holiday.

Concerns about growth in China remain, while technology stocks continued to rise in the US amid bets that the Federal Reserve is nearing the end of the hiking cycle.

“The Chinese economy is really a story of a crisis of confidence right now,” Meera Pandit, global market analyst at JPMorgan Asset Management, said on Bloomberg Radio. “We really need to see lawmakers and then policy makers inject some kind of fiscal stimulus to help that story of confidence.”

Bloomberg Economics is among a minority of forecasters who see the People’s Bank of China cutting its medium-term lending facility on Thursday. Positioning in the rate markets suggests the Fed will hike again, with the move likely to come next month rather than Wednesday.

Treasury yields rose 1 basis point for both the two- and 10-year maturities.

In the currency markets, the dollar index was flat, as was the yen. The offshore yuan fell about 0.1% against the dollar.

“The main focus this coming week will be the US Core CPI and then the Federal Open Market Committee, where our economic team expects an ‘optimistic pause’ from the Fed,” analysts at Nomura Holdings, including Chetan Seth, wrote in a note. “. With market prices mostly up by July, they don’t see a negative impact on stocks beyond “any unexpected initial negative reaction.”

Story continues

While the consensus is for the Fed to pause this week, there are also concerns that its 10 hikes in the current cycle have done damage, and this has bond managers including Allianz Global Investors’ Fidelity International anticipating an economic downturn.

Last week’s unexpected rises from the Bank of Canada and the Reserve Bank of Australia added an additional element of uncertainty to the markets. The European Central Bank is expected to raise its benchmark interest rate on Thursday and the Bank of Japan is expected to sit still on Friday.

Elsewhere, oil extended losses amid persistent concerns about the demand outlook as Goldman Sachs Group Inc. Her predictions for the price again. Brent traded below $75 a barrel and WTI was below $70. Gold fell.

Main events this week:

• US Consumer Price Index, Tuesday

• The Federal Open Market Committee begins a two-day meeting, Tuesday

• Eurozone Industrial Production, Wed

• US Producer Price Index, Wednesday

• FOMC rate decision, Wed

• The International Energy Agency’s Oil Market Report was released on Wednesday

• China’s central bank meeting to decide on one-year loan rate policy, Thursday

• China real estate prices, retail sales, industrial production, Thursday

• European Central Bank interest rate decision, Thursday

• US initial jobless claims, retail sales, imperial manufacturing, business inventories, and industrial production

• Eurozone CPI, Friday

• Bank of Japan interest rate decision on Friday

• Consumer confidence in the American University of Michigan, Friday

Some of the major moves in the markets:

Stores

• S&P 500 futures were up 0.1% as of 2:10 PM Tokyo time. The S&P 500 rose 0.1% on Friday

• Nasdaq 100 futures rose 0.2%. The Nasdaq 100 rose 0.3% on Friday

• Futures on the Euro Stoxx 50 rose 0.4%.

• Japan’s Topix rose 0.5%.

• Hong Kong’s Hang Seng fell 0.1%.

• China’s Shanghai Composite Index was little changed

currencies

• The Bloomberg Spot Dollar Index has not changed

• The euro was little changed at $1.0742

• The Japanese yen was little changed at 139.46 per dollar

• The offshore yuan fell 0.1 percent to 7.1527 per dollar

• The Australian dollar was not changed much at $0.6741

Digital currencies

• Bitcoin fell 1.3 percent to $25,799.35

• Ether fell 1.8% to $1,738.85

bonds

goods

• West Texas Intermediate crude fell 1.3 percent to $69.23 a barrel

• Spot gold fell 0.2 percent to $1,957.68 an ounce

This story was produced with help from Bloomberg Automation.

– With assistance from Ishika Mookerjee.

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