European Equity Futures Climb; Dollar Fluctuates: Markets Wrap

(Bloomberg) — Global stock markets were mixed ahead of US inflation data due later Friday, with futures for the S&P 500 fluctuating, European contracts higher and Asia’s main equity benchmarks falling. Most Read from BloombergAn index of dollar strength swung between small gains and losses while the yen trimmed a weekly rally that was fueled by the Bank of Japan’s earlier adjustment of yield-curve control. Treasury yields edged fractionally higher, adding to a move that pushed up the policy-sensitive two-year yield on Thursday. Australian and New Zealand government bond yields rose. Japan’s benchmark 10-year yield slipped to 0.37%, below the BOJ’s new upper limit of 0.5%. Sentiment in Asian stocks was negative, with declines led by Hong Kong-listed tech shares. Weakness was also evident in benchmark indexes for Japan, Australia and South Korea. The moves flowed through from the US session Thursday, when a slump in US technology stocks and more economic data validating the case for the Federal Reserve to keep hiking interest rates set a downbeat tone.Read More: Tech Bulls Face Worst December in 20 Years as Fed Anxiety GrowsUS data painted a picture of a resilient economy, stoking concern that the Fed has a longer way to go to subdue inflation. Initial jobless claims rose less than forecast in the week ended Dec. 17, underscoring the strength in the labor market. Third-quarter gross domestic product was revised to 3.2% — compared with a previously reported 2.9% advance — on firmer spending. Looking ahead to later Friday, investors will be focused on the core PCE deflator, which is a key inflation measure tracked by the Fed.Story continuesMeanwhile, concerns are also growing that Japanese investors could be persuaded to bring home some of the trillions of dollars they have stashed in foreign stocks and bonds as the yen and local bond yields rise in the wake of this week’s sudden hawkish move from the Bank of Japan. That could further lift global borrowing costs and drag on already cooling economic growth, with euro zone bonds seen especially vulnerable. Elsewhere in markets, oil headed for a substantial weekly gain as Russia said it may cut crude production in response to the price cap imposed by the Group of Seven on its exports, highlighting risks to global supplies in the new year. Key events this week: US consumer income, new home sales, US durable goods, PCE deflator, University of Michigan consumer sentiment, FridaySome of the main moves in markets:StocksS&P 500 futures rose 0.1% as of 7:13 am London time. The S&P 500 closed 1.5% lowerNasdaq 100 futures were little changed. The Nasdaq 100 fell 2.5%Japan’s Topix fell 0.5%Hong Kong’s Hang Seng fell 0.1%The Shanghai Composite fell 0.3%Euro Stoxx 50 futures rose 0.4%CurrenciesThe Bloomberg Dollar Spot Index was little changedThe euro rose 0.2% to $1.0616The Japanese yen fell 0.2 % to 132.59 per dollarThe offshore yuan rose 0.2% to 6.9945 per dollarThe British pound was little changed at $1.2044CryptocurrenciesBitcoin rose 0.3% to $16,842.29Ether rose 0.6% to $1,221.79BondsCommodities West Texas Intermediate crude rose 1.2% to $78.39 a barrelSpot rose 1.78% gold 0.79% gold an ounceThis story was produced with the assistance of Bloomberg Automation.–With assistance from Rheaa Rao.Most Read from Bloomberg Businessweek©2022 Bloomberg LP

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