Major currencies held to narrow ranges and US equity futures made small gains in cautious trading Monday as the Asian trading session got underway.
(Bloomberg) — Major currencies held to narrow ranges and US equity futures made small gains in cautious trading Monday as the Asian trading session got underway.
Investors are weighing the US jobs report, which sent policy-sensitive two-year Treasury yields back to around 4% when it was released Friday. The data support bets for another Federal Reserve rate increase to quell inflation while also easing some concerns the US economy is careening toward recession.
Contracts for the S&P 500 rose 0.2% on Monday after small gains for futures when the non-farm payrolls figures were released. The dollar’s moves against Group-of-10 currencies was confined to about 0.2% early Monday.
Oil was marginally higher and cryptocurrencies were little changed.
Chinese military drills around Taiwan, following the island’s president visiting the US, may add to the sense of caution in Asian markets. Easter holidays will also keep trading shuttered Monday in Hong Kong, Australia and New Zealand.
“March’s NFP report delivered only a half-victory for the market but effectively reminded Fed of its undone job,” said Hebe Chen, an analyst at IG Markets Ltd. “The ‘glass half-full’ sentiment is poised to bake into a more divided and fragile risk appetite.”
US payrolls rose at a firm pace in March of 236,000, which was in line with forecasts and followed an upwardly revised 326,000 advance in February. The unemployment rate dropped again near record lows to 3.5%.
Swaps trading showed the odds for a quarter percentage point interest-rate increase at the Fed’s May meeting rose to about two in three, up from roughly 50-50 before the data landed. Investors have been aggressively pricing in rate cuts later this year as economic data falls short of estimates, suggesting the American economy is slowing.
The next major data point for the Fed is a report on consumer prices, due April 12. Officials deliver their policy move on May 3.
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.2% as of 7:27 a.m. Tokyo time.
- Nasdaq 100 futures rose 0.1%
- Nikkei 225 futures rose 0.4%
Currencies
- The euro was little changed at $1.0909
- The Japanese yen rose 0.2% to 131.88 per dollar
- The offshore yuan was little changed at 6.8762 per dollar
- The Australian dollar was little changed at $0.6670
Cryptocurrencies
- Bitcoin rose 1% to $28,422.1
- Ether rose 0.5% to $1,867
Commodities
- West Texas Intermediate crude rose 0.4% to $81.05 a barrel
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee and Abhishek Vishnoi.
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