US equity futures extended their advance Thursday, pulling Asian shares higher amid signs that a four-day run of declines for the S&P 500 is primed for a snapback.
(Bloomberg) — US equity futures extended their advance Thursday, pulling Asian shares higher amid signs that a four-day run of declines for the S&P 500 is primed for a snapback.
Contracts for the Wall Street benchmark rose 0.5% while those for the tech-heavy Nasdaq 100 rallied 0.9% after chipmaker Nvidia Corp. issued a bullish outlook and surged more than 9% in extended trading.
Key stock indexes in Hong Kong, mainland China and South Korea all rose, along with European futures, while Australian shares fell. There was no trading of equities in Tokyo or Treasuries in Asian hours due to a holiday in Japan.
The greenback weakened against all of its Group-of-10 currency counterparts after a rally on Wednesday. The Australian dollar showed the biggest gains on stronger-than-expected business investment data and dip-buying by exporters.
Australian bond yields edged higher while those for New Zealand’s 2-year and 10-year debt rose more than 10 basis points.
The 10-year US Treasury benchmark fell four basis points Wednesday, although the decline moderated after the release of minutes from the Federal Reserve.
The minutes showed officials expect further interest rate increases to tame inflation. They also revealed that “a few” officials were open to a 50 basis-point hike in the central bank’s meeting earlier this month when it raised interest rates 25 basis points.
Investors increased expectations for the peak to the Fed’s interest rate cycle. Market pricing now implies expectations for a peak of nearly 5.4% in July. A month ago, investors had priced in a peak of 4.9% in June. An index of the dollar was flat after strengthening Wednesday.
“One of our big concerns coming into this year was the market was anticipating an event that wasn’t likely to occur, that being a dovish Fed pivot,” Danielle Poli, co-portfolio manager of the diversified income fund for Oaktree Capital Management, said in an interview with Bloomberg Television. “The market has woken back up a little bit in these last two weeks.”
Jobless claims data due Thursday in the US will help shine a light on the strength of the labor market, which has remained stubbornly robust through the rate-hiking cycle. Eurozone inflation data due today will also help investors outline the health of the European economy.
Elsewhere in markets, South Korea’s Kospi rose more than 1% and the won advanced after the central bank kept its benchmark interest rate unchanged with its first pause in rate increases in a year.
Oil edged higher — after the longest run of losses this year — as the dollar fell and traders took stock of a mixed demand outlook of tightening US monetary policy and China’s reopening.
lumping exports to weakening consumption.
Key events this week:
- Eurozone CPI, Thursday
- US GDP, initial jobless claims, Thursday
- Atlanta Fed President Raphael Bostic speaks, Thursday
- BOJ governor-nominee Kazuo Ueda appears before Japan’s lower house, Friday
- US PCE deflator, personal spending, new home sales, University of Michigan consumer sentiment, Friday
- Russia’s invasion of Ukraine hits the one-year mark, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.5% as of 12:29 p.m. Tokyo time. The S&P 500 fell 0.2%
- Nasdaq 100 futures rose 0.9%. The Nasdaq 100 rose 0.1%
- Australia’s S&P/ASX 200 fell 0.4%
- Hong Kong’s Hang Seng rose 0.5%
- The Shanghai Composite rose 0.1%
- Euro Stoxx 50 futures rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.2% to $1.0622
- The Japanese yen was little changed at 134.74 per dollar
- The offshore yuan rose 0.2% to 6.8876 per dollar
- The Australian dollar rose 0.5% to $0.6835
Cryptocurrencies
- Bitcoin rose 3.1% to $24,534.57
- Ether rose 3.2% to $1,672
Bonds
- The yield on 10-year Treasuries declined four basis points to 3.92% on Wednesday
- Australia’s 10-year yield advanced one basis point to 3.89%
Commodities
- West Texas Intermediate crude rose 0.5% to $74.33 a barrel
- Spot gold rose 0.2% to $1,828.61 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Akshay Chinchalkar.
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