US stock futures gain, Treasury yields rise

US stock futures pointed to a rebound from last week’s selloff, while Treasury yields rose. Wheat prices climbed as Ukraine attacked a Russian oil tanker in the Kerch Strait, threatening a key export route. 

S&P 500 contracts added 0.4% in early European trading and 10-year Treasury yields increased five basis points, reversing some of the moves made on Friday in the wake of a mixed US jobs report. 

In European markets, the focus was on German bonds. Two-year notes rallied as much as six basis points in response to an announcement made late on Friday by the Bundesbank, which said it will stop paying interest on domestic government deposits. The move caught traders off guard and fueled speculation that more money will flow into higher-yielding securities. 

Trading in European stock markets was subdued on Monday, with most investors still considering the conflicting economic signals in Friday’s US jobs report, which showed softer-than-expected payrolls growth, but wages above forecasts. In remarks prepared for an event in Colorado on Saturday, Federal Reserve Governor Michelle Bowman said the policymakers may need to raise rates further in order to fully restore price stability.

The key data point for the week will be US consumer price index reading on Thursday, which is expected to show moderate price growth. The index is projected to rise 0.2% in July for a second month after excluding food and energy costs, marking the smallest back-to-back gains in 2 1/2 years. 

In Asia, the yen fell for the first time in four days. A summary of opinions from the Bank of Japan’s July meeting showed that one member said the central bank should allow greater flexibility in yield curve control. 

Key events this week:

• Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman at Fed Listens event, Monday
• Japan household spending, Tuesday
• US wholesale inventories, trade, Tuesday
• Philadelphia Fed President Patrick Harker speaks, Tuesday
• China CPI, PPI, Wednesday
• India rate decision, Thursday
• US initial jobless claims, CPI, Thursday
• Atlanta Fed President Raphael Bostic pre-recorded remarks for employment webinar, Thursday
• UK industrial production, GDP, Friday
• US University of Michigan consumer sentiment, PPI, Friday

Some of the main moves in markets:

STOCKS

• The Stoxx Europe 600 fell 0.1% as of 9:32 a.m. London time
• S&P 500 futures rose 0.4%
• Nasdaq 100 futures rose 0.5%
• Futures on the Dow Jones Industrial Average rose 0.3%
• The MSCI Asia Pacific Index was little changed
• The MSCI Emerging Markets Index was little changed

CURRENCIES

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.0980
• The Japanese yen fell 0.4% to 142.31 per dollar
• The offshore yuan fell 0.2% to 7.2038 per dollar
• The British pound fell 0.1% to $1.2730

CRYPTOCURRENCIES

• Bitcoin fell 0.3% to $29,013.65
• Ether rose 0.1% to $1,832.15

BONDS

• The yield on 10-year Treasuries advanced six basis points to 4.10%
• Germany’s 10-year yield advanced two basis points to 2.58%
• Britain’s 10-year yield advanced five basis points to 4.43%

COMMODITIES

• Brent crude fell 0.3% to $85.93 a barrel
• Spot gold fell 0.4% to $1,934.94 an ounce

This story was produced with the assistance of Bloomberg Automation.

Related Topics: stock, yields