Share futures were mixed Wednesday as investors awaited clues from top central bankers for direction of their monetary policies.
(Bloomberg) — Share futures were mixed Wednesday as investors awaited clues from top central bankers for direction of their monetary policies.
European equity contracts gained 0.4% after the Stoxx Europe 600 Index had closed little changed on Tuesday, halting a six-day losing streak. US stock futures edged lower.
Policymakers are gathering at the European Central Bank’s forum in Portugal, where ECB’s Christine Lagarde, Federal Reserve’s Jerome Powell, Bank of Japan’s Kazuo Ueda and Bank of England’s Andrew Bailey will speak on a policy panel. Central banks have been moving aggressively to combat inflation, which is proving to be stickier than expected.
The broader picture in stocks was also mixed in Asia, with a gauge of Asian shares up 0.5%. Japan and Australia rallied, while Chinese equities fluctuated amid a report that the Biden administration was considering further curbs on exports of powerful chips used to train artificial intelligence.
Nvidia Corp. slid in US after-hours trading after earlier tech megacaps had led a rebound in US equities on strong economic data. Yet the data showing economic resilience also underscored the likelihood that the Fed has further to go in tightening monetary policy. That pushed Treasury yields higher Tuesday. They steadied in Asia trading Wednesday.
In currency markets, the Australian dollar slid as much as 1% before paring some of the drop. Meanwhile, the yen strengthened away from the closely-watched 145 level versus the dollar after Japan’s top currency official said authorities will respond should there be excessive foreign exchange moves. The offshore yuan fell slightly after the People’s Bank of China set its daily reference rate for the managed currency in line with estimates.
The longer-term market impact of more US curbs on technology sales to China was unclear.
“The report of the US considering more restrictions on chip exports to China may have hurt sentiment,” said Vey-Sern Ling, managing director at Union Bancaire Privee in Singapore.
Robert Lea, an analyst at Bloomberg Intelligence, said further restrictions could delay AI developments by Chinese firms without changing things significantly in the long run. “Chinese AI firms may also be able to source dedicated AI chips from third party countries,” said Lea. “So I think it will be hard for US to enforce the regulations.”
The results of the Fed’s annual stress test of the banking industry will come out later Wednesday. Analysts largely expect banks to sail through the tests even as regulators explore more stringent requirements in the aftermath of a few collapses in the financial industry.
Elsewhere in markets, oil rose as investors weighed the outlook for monetary policy and a mixed industry report on US crude stockpiles. Gold was little changed.
Key events this week:
- US wholesale inventories, goods trade balance, Wednesday
- Fed to unveil results of annual banking industry stress test, Wednesday
- Policy panel with ECB’s Christine Lagarde, Fed Chair Jerome Powell, BOJ’s Kazuo Ueda and BOE’s Andrew Bailey, Wednesday
- Eurozone economic confidence, consumer confidence, Thursday
- US GDP, initial jobless claims, Thursday
- Atlanta Fed President Rafael Bostic speaks, Thursday
- China manufacturing PMI, non-manufacturing PMI, balance of payments, Friday
- US personal income and spending, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 6:54 a.m. London time. The S&P 500 rose 1.15%
- Nasdaq 100 futures fell 0.3%. The Nasdaq 100 rose 1.75%
- Japan’s Topix rose 1.9%
- Australia’s S&P/ASX 200 rose 1.2%
- Hong Kong’s Hang Seng was little changed
- The Shanghai Composite was little changed
- Euro Stoxx 50 futures rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was little changed at $1.0952
- The Japanese yen was little changed at 143.99 per dollar
- The offshore yuan fell 0.1% to 7.2330 per dollar
- The Australian dollar fell 0.7% to $0.6640
- The British pound fell 0.2% to $1.2728
Cryptocurrencies
- Bitcoin fell 0.6% to $30,462.14
- Ether fell 1.3% to $1,868.72
Bonds
- The yield on 10-year Treasuries was little changed at 3.76%
- Japan’s 10-year yield advanced two basis points to 0.390%
- Australia’s 10-year yield declined five basis points to 3.88%
Commodities
- West Texas Intermediate crude rose 0.5% to $68.04 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Charlotte Yang, Ameya Karve and Allegra Catelli.
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