Bonds rebound, equity traders await tech earnings

Global bond markets rebounded, with the US 10-year yield sliding to 4.8%, amid growing speculation that the recent selloff was excessive. Nasdaq 100 index futures rose ahead of earnings from Microsoft Corp. and Alphabet Inc.

Treasury 10-year yields slipped five basis points to a one-week low after reaching the highest since 2007. Europe’s Stoxx 600 index fell 0.3%, while US futures added 0.3%. Bitcoin topped $35,000 and the euro swung to a loss against the dollar as data showed the French and German economies struggling.  

Treasuries are recovering after some of the market’s most prominent bears warned of an economic slowdown, stoking bets the declines have overshot and that the Federal Reserve will need to lower interest rates. Wild swings in government debt are unsettling investors as a resilient economy makes it hard to work out when the Fed will halt rate hikes. Surging government issuance and geopolitical tensions are also clouding the outlook. 

Oil advanced with Brent crude trading above $90 per barrel. There are growing calls in Israel to rethink the scope of any ground invasion of Gaza as talks to free the hostages taken by Hamas intensified and French President Emmanuel Macron becomes the latest world leader to visit.  

Separately, Bitcoin hit the highest level since May last year as the possible approval in the coming weeks of the first US spot Bitcoin ETFs stoked appetite for the token. Asset managers BlackRock Inc. and Fidelity Investments are among those in the race to offer such products. 

In Asia, most Chinese stock gauges rose after the nation’s sovereign wealth fund bought exchange-traded funds to shore up prices. Stocks in the region were mixed, with markets in Japan and South Korea reversing declines of more than 1% to trade higher. 

The rebound in Chinese equities “shows that while it may still be too early to call a bottom, the authorities are making it a rule to step on the brakes whenever there looks like there’s overwhelming downward momentum,” said Raymond Chen, fund manager at Zizhou Investment Asset Management.

Key events this week:

• Reserve Bank of Australia Governor Michele Bullock speaks at the Commonwealth Bank Annual Conference in Sydney, Tuesday
• Paris-based International Energy Agency releases its world energy outlook annual report, Tuesday
• Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Tuesday
• Euro-area bank lending survey, Tuesday
• US S&P Global Manufacturing PMI, Tuesday
• Microsoft, Alphabet earnings, Tuesday
• Australia CPI, Wednesday
• Germany IFO business climate, Wednesday
• Canada rate decision, Wednesday
• US new home sales, Wednesday
• IBM, Meta earnings, Wednesday
• European Central Bank interest rate decision; President Christine Lagarde holds news conference, Thursday
• US wholesale inventories, GDP, US durable goods, initial jobless claims, pending home sales, Thursday
• Intel, Amazon earnings, Thursday
• China industrial profits, Friday
• Japan Tokyo CPI, Friday
• US PCE deflator, personal spending and income, University of Michigan consumer sentiment, Friday
• Exxon Mobil earnings, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.3% as of 9:07 a.m. London time
• S&P 500 futures rose 0.3%
• Nasdaq 100 futures rose 0.5%
• Futures on the Dow Jones Industrial Average rose 0.2%
• The MSCI Asia Pacific Index rose 0.3%
• The MSCI Emerging Markets Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.1% to $1.0655
• The Japanese yen rose 0.2% to 149.45 per dollar
• The offshore yuan was little changed at 7.3159 per dollar
• The British pound was little changed at $1.2258

Cryptocurrencies

• Bitcoin rose 8% to $34,073.5
• Ether rose 6.1% to $1,812.86

Bonds

• The yield on 10-year Treasuries declined four basis points to 4.81%
• Germany’s 10-year yield declined eight basis points to 2.79%
• Britain’s 10-year yield declined nine basis points to 4.51%

Commodities

• Brent crude rose 0.8% to $90.53 a barrel
• Spot gold rose 0.1% to $1,975.28 an ounce

This story was produced with the assistance of Bloomberg Automation.

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