Stocks Steady With U.S. Futures; Dollar Weakens: Markets Wrap

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European stocks fluctuated on Monday, with travel shares slumping amid restrictions prompted by Covid-19 strains, while U.S. futures were steady with Asian equities.

The Stoxx 600 Index was little changed as gains in chemical shares offset declines in the likes of Tui AG and EasyJet Plc, as the highly contagious Delta strain threatens to derail summer travel in Europe just as the northern hemisphere summer season kicks off.

Contracts on the S&P 500 Index drifted higher following the best week for the underlying gauge since February. Southeast Asian markets underperformed, led by Malaysia, where a nationwide lockdown was extended. Treasuries held losses, while the dollar slipped. WTI crude oil fluctuated around $74 a barrel.

Renewed period of earnings growth may boost European stocks

Global stocks are trading near a record high as anxiety about the Federal Reserve’s hawkish tilt eased, with investors dialing back concerns that U.S. policy makers will rush to boost interest rates despite mounting inflation pressures. Volatility receded, with the Cboe Volatility Index, or the VIX, sinking to pre-pandemic levels. Still, markets remain sensitive to more central banks debating the withdrawal of emergency stimulus.

“The risk of higher bond yields – and potentially a pull back in equities – due to ongoing strong U.S. economic data remains,” David Bassanese, chief economist at BetaShares, said in a note. “So far at least, long-term bond yields remain contained and equities more focused on the V-shaped rebound in economic growth and corporate earnings.”

Read: Peak Central Bank Support Marks New Phase for World Recovery

For more market commentary, follow the MLIV blog.

Here are some events to watch in the markets this week:

  • OECD meets in Paris to finalize a proposal to overhaul global minimum corporate taxation Wednesday
  • China’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party Thursday
  • OPEC+ ministerial meeting Thursday
  • ECB President Christine Lagarde speaks Friday
  • The U.S. jobs report is forecast to show an acceleration in payrolls growth in June Friday

These are some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 was little changed as of 8:23 a.m. London time
  • Futures on the S&P 500 rose 0.1%
  • Futures on the Nasdaq 100 rose 0.3%
  • Futures on the Dow Jones Industrial Average were little changed
  • The MSCI Asia Pacific Index was little changed
  • The MSCI Emerging Markets Index was little changed

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.1942
  • The Japanese yen was little changed at 110.64 per dollar
  • The offshore yuan was little changed at 6.4593 per dollar
  • The British pound rose 0.4% to $1.3933

Bonds

  • The yield on 10-year Treasuries was little changed at 1.52%
  • Germany’s 10-year yield was little changed at -0.16%
  • Britain’s 10-year yield was little changed at 0.77%

Commodities

  • Brent crude was little changed
  • Spot gold rose 0.1% to $1,783.39 an ounce

— With assistance by Michael Msika