Shares in Japan advanced alongside US equity futures on Friday and Treasuries extended a rally from the prior session on signs of a cooling jobs market and renewed concerns over regional lenders.
Hong Kong equity futures gained ground, while stocks in Australia opened flat after a mixed US session on Thursday. The S&P 500 slid 0.2% following jobs and inflation data, while the tech-heavy Nasdaq 100 added 0.3% after Google parent Alphabet Inc. showcased its artificial intelligence tools.
Australian and New Zealand bonds climbed after the 10-year Treasury yield fell six basis points lower on Thursday. The dollar was flat after rising the most in two months in the prior session.
Investors are digesting news that a meeting between President Joe Biden and House Speaker Kevin McCarthy set for Friday will be postponed. The delay reflects progress in staff-level discussions, according to people familiar with the talks.
Data showed US initial jobless claims reached the highest since October 2021 while producer prices rose 0.2% in April, trailing economists’ estimates for a 0.3% increase. The reports indicate the Federal Reserve’s policy-tightening campaign may finally be having an effect on inflation as the central bank walks a tightrope between reining in rising prices and tipping the economy into a downturn.
Much uncertainty remains, though, which is encouraging investors to look for hedges against volatility. JPMorgan Chief Executive Officer Jamie Dimon said “we need to finish the bank crisis,” in a Bloomberg Television interview, adding regulators should do “whatever they need to do to make it better.” He predicted more regulations were ahead for lenders.
Copper fell to the lowest level since November as commodity prices slumped on renewed concerns about China’s economic recovery after credit and new loans fell in April.
Elsewhere, the Bloomberg Commodity Index is set for its fourth weekly decline on the weak US and Chinese economic data, its longest such streak since September.
Oil rose - following a two-day decline — as the US signaled it may start refilling the Strategic Petroleum Reserves after June.
On a positive note, US-listed Chinese stocks climbed the most in three months after earnings from JD.com boosted e-commerce stocks, and US National Security Adviser Jake Sullivan met with China’s top diplomat Wang Yi in a move to ease rising tensions between the nations.
Adani Group continues to face problems, with global index manager MSCI Inc. to exclude two of its firms from its India gauge. That’s a potential blow to the stocks as they try to recover from the rout triggered by a short-seller report earlier this year. MSCI also said 86 securities will be added to its All Country World Index, and 39 deleted.
Separately, the Bank of England raised its benchmark lending rate to the highest level since 2008 and said further increases may be needed if inflationary pressures persist.
Key events this week:
- US University of Michigan consumer sentiment, Friday
- Fed Governor Philip Jefferson and St. Louis Fed President James Bullard participate in panel discussion on monetary policy at Stanford University, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.2% as of 9:36 a.m. Tokyo time. The S&P 500 fell 0.2%
- Nasdaq 100 futures rose 0.2%. The Nasdaq 100 rose 0.3%
- Hang Seng futures rose 0.7%
- Japan’s Topix rose 0.1%
- Australia’s S&P/ASX 200 was little changed
- Euro Stoxx 50 futures rose 0.3%
Currencies
- The Bloomberg Dollar Spot Index was unchanged
- The euro was unchanged at $1.0916
- The Japanese yen was unchanged at 134.53 per dollar
- The offshore yuan was little changed at 6.9592 per dollar
Cryptocurrencies
- Bitcoin was little changed at $26,987.52
- Ether was little changed at $1,795.55
Bonds
- The yield on 10-year Treasuries was little changed at 3.38%
- Australia’s 10-year yield declined five basis points to 3.34%
Commodities
- West Texas Intermediate crude rose 0.7% to $71.36 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Peyton Forte and Emily Graffeo.
