(Bloomberg) – Sovereign bonds have extended a boom, U.S. stock futures rose and the dollar fell on Monday, indicating significant markets after the turmoil led to last week’s shift in government debt.
Treasury yields have stabilized, and Australian and New Zealand debt have risen. Australia’s ten-year sovereign return fell the most in a year after the central bank doubled its purchases during its regular bond-buying operation, in a new effort to satisfy fixed-income markets.
Bond recovery helped the S&P 500 and Nasdaq 100 stock futures contracts jump while stocks in Japan, Australia and Hong Kong jumped. On Friday, the S&P 500 slipped and technology stocks made a modest upswing as a rise in the treasury pushed back ten-year returns to 1.40%.
Most Group-of-10 currencies have climbed, with the Australian and New Zealand dollars among the top performers, despite data showing that China’s economic recovery slowed in February. Commodities rose as oil exceeded $ 62 a barrel.
“With a large increase in returns due to the improved growth prospects and the reopening of prospects, the risk appetite is continuing,” said Esty Dwek, Head of Global Strategy at Natixis Investment Manager Solutions. “The rate and extent of the return in the return is more important than the absolute level, which indicates that as long as the movement is gradual, the risk assets must be able to absorb it.”
Global effects have stabilized from the sharp losses of last week after central banks from Asia to Europe gave assurances that policy support was in place. This helped pull back the treasury returns from their highest level in a year and put a floor under the stocks. Investors have become excited about the prospect of faster inflation that will lead to tighter policies, with traders starting their position for the Federal Reserve to raise interest rates as fast as next year.
“The market is testing the Fed and global central banks how serious they are here,” Lex Lord Capital Management CEO Al Lord told Bloomberg TV. “There are growth expectations and growing inflation problems, and it’s playing out in the markets.”
Over the weekend, the U.S. House of Representatives passed President Joe Biden’s $ 1.9 billion Covid-19 aid package. The bill goes to the Senate, where Biden will have to gain Republican support or that he will not lose a single Democratic vote.
There are some important events to watch this week:
The PMI for manufacturing Caixin China is due Monday. Reserve Bank of Australia proposes monetary policy on Tuesday. The U.S. Federal Reserve Beige book should be Wednesday. OPEC + meeting on production Thursday. Fed Chairman Jerome Powell will discuss the economy at a Wall Street Journal event on Thursday. The U.S. jobs report from Friday to Friday will provide an update on the speed and direction of the country’s labor market recovery. Beijing will unveil its key economic goals on March 5, when the National People’s Congress convenes for its annual meeting.
These are some of the key movements in markets:
Stocks
S&P 500 futures have risen 0.8% in Tokyo since 10:26 p.m. The S&P 500 index fell 0.5%. Japan’s Topix index rose 1.7%. The Australian S & P / ASX 200 index rose 1.5%. Hang Seng index rose 1.7%.
Currencies
The yen is trading at 106.57 per dollar. The foreign yuan was at 6.4739 per dollar, up 0.1%. The Bloomberg Dollar Spot Index fell 0.3%. The euro was at $ 1.2093, up 0.2%. The Aussie dollar rose 0.8% to 77.65 US cents.
Effects
Australia’s 10-year yield fell 27 basis points to 1.65%. The yield on 10-year treasury was constant at 1.41%.
Commodities
West Texas Intermediate crude rose 2.2% to $ 62.83 a barrel, and 0.6% to $ 1,743.60 an ounce.
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