US equity futures were steady and Asian stocks rose in holiday-thinned trading as investors assessed the Federal Reserve’s policy path following Friday’s US jobs data.
(Bloomberg) — US equity futures were steady and Asian stocks rose in holiday-thinned trading as investors assessed the Federal Reserve’s policy path following Friday’s US jobs data.
S&P 500 contracts fell less than 0.1%, while MSCI Inc.’s Asia-Pacific equity index added 0.2%. Markets across Europe, Hong Kong and Australia closed for Easter holidays and trading volumes were expected to be light.
Treasury yields dropped across the curve in Asia after jumping Friday when the US monthly payrolls data boosted bets on a Fed rate increase in May. The numbers also eased concern the world’s biggest economy is heading for a recession.
Investors are keeping a close eye on new Bank of Japan Governor Kazuo Ueda who will hold his inaugural press conference later Monday. Chinese military drills around Taiwan, following the island’s president visiting the US, added to the sense of caution in Asian markets.
Oil steadied and gold fell below $2,000. Cryptocurrencies were little changed.
US payrolls rose at a pace of 236,000 in March, in line with forecasts, and followed an upwardly revised 326,000 advance in February. The unemployment rate dropped again to 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 US economy is slowing.
“The Fed will still see the need for further cooling in the labor market,” Win Thin, global head of currency strategy at Brown Brothers Harriman, wrote in a research note. “This week’s CPI and PPI data are likely to underscore the fact that inflation remains stubbornly high and so we look for the hawkish tilt in Fed comments to continue this week.”
The next major data point for the Fed is a report on consumer prices, due April 12. Fed officials will deliver their next rate decision on May 3.
OPEC+ revived inflation jitters by cutting production so the next round of US data will have to show noticeable easing from the services side as well “for investors to really take inflation concerns off the table,” Charu Chanana, market strategist at Saxo Capital Markets, wrote in a note. “We don’t think we are there yet.”
Key events this week:
- US wholesale inventories, Monday
- New York Fed President John Williams takes part in discussion hosted by the Economics Review at New York University, Monday
- China PPI, CPI, Tuesday
- IMF world economic outlook, global financial stability reports, Tuesday
- Chicago Fed’s Austan Goolsbee, Minneapolis Fed’s Neel Kashkari and Philadelphia Fed’s Patrick Harker speak at separate events, Tuesday
- Canada rate decision, Wednesday
- US FOMC minutes, CPI, Wednesday
- Richmond Fed’s Thomas Barkin speaks, Wednesday
- China trade, Thursday
- US PPI, initial jobless claim, Thursday
- US retail sales, business inventories, industrial production, University of Michigan consumer sentiment, Friday
- Major US banks JPMorgan Chase, Wells Fargo and Citigroup report earnings, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 8:56 a.m. London time
- Nasdaq 100 futures fell 0.4%
- The MSCI Asia Pacific Index rose 0.2%
- The MSCI Emerging Markets Index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0912
- The Japanese yen was little changed at 132.05 per dollar
- The British pound was little changed at $1.2419
Cryptocurrencies
- Bitcoin rose 0.6% to $28,303.98
- Ether rose 0.2% to $1,860.78
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.36%
Commodities
- Brent crude was little changed
- Spot gold fell 0.5% to $1,997.36 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee, Katie Greifeld and Liz Capo McCormick.
(A previous version of the story corrected the gold price.)
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