(Bloomberg) — U.S. Treasuries were firmer after Monday’s decline, but stock futures fell as traders speculated on the direction of U.S. interest rates.
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U.S. futures fell 0.2%, with the S&P 500 on track to drop for the first time in six weeks. Europe’s Stoxx 600 index made small moves. The 10-year Treasury yield added 1 basis point to 4.21%, following an 11 basis point increase yesterday. The dollar was little changed.
Monday’s bond selloff came as investors dialed back expectations for Fed rate cuts after central bank officials signaled they wanted to cut rates at a slower pace. Additionally, traders are weighing the impact on inflation of a possible presidential victory, given that President Donald Trump’s promised tax cuts and trade tariffs could ultimately be accompanied by higher inflation rates and higher interest rates. We are considering.
“This clearly has to do with trading on Republican wins, and therefore policies that are much more inflationist than Democratic policies. We’re in a market that’s betting on Trump.” said Christopher Dembick, senior investment advisor at Pictet Asset Management. “Rising yields are starting to threaten the stock market.”
Bonds are selling everywhere as traders reconsider the Fed path
Gold rose, nearing record highs on Monday, on demand for escape from traders focused on geopolitical risks such as the Middle East conflict and the U.S. election. Crude oil fell after rising nearly 2% on Monday.
Pictet’s Dembick said Europe is in the midst of a poor performance, putting pressure on stock prices from bond markets. So far, about 47% of MSCI European companies have reported results that have been worse than expected, and just 27% have exceeded expectations, according to data compiled by Bloomberg Intelligence.
Company highlights:
Germany’s SAP rose as much as 5.6% after delivering gains in several key indicators in the third quarter and boosting some elements of its full-year outlook.
Shares of Hyundai Motor India fell on its Mumbai debut on Tuesday after the company raised $3.3 billion in the country’s largest-ever initial public offering. The IPOs of Tokyo Metro Co., Ltd. and Horizon Robotics Co., Ltd. responded to strong demand.
This week’s main events:
ECB’s Christine Lagarde will be interviewed on Bloomberg TV on Tuesday
BOE’s Andrew Bailey, ECB’s Klaas Nott and Robert Holzmann speak at the Bloomberg Global Regulation Forum in New York on Tuesday
Philadelphia Fed President Patrick Harker speaks on Tuesday
Canadian interest rate decision Wednesday
Eurozone consumer confidence Wednesday
US used home sales Wednesday
Boeing, Tesla and Deutsche Bank earnings results Wednesday
Fed Beige Book, Wednesday
U.S. new home sales, unemployment claims, S&P Global Manufacturing and Services PMI, Thursday
UPS, Barclays earnings, Thursday
Fed’s Beth Hammack speaks Thursday
US Durable Goods, University of Michigan Consumer Sentiment, Friday
the story continues
The main movements in the market are:
stock
As of 8:50 a.m. London time, the Stoxx European 600 was down 0.1%.
S&P 500 futures fell 0.2%
Nasdaq 100 futures fell 0.3%
Dow Jones Industrial Average futures fell 0.2%.
MSCI Asia Pacific Index falls 1%
MSCI Emerging Markets Index falls 0.4%
currency
The Bloomberg Dollar Spot Index fell 0.1%.
The euro rose 0.2% to $1.0834.
The Japanese yen was almost unchanged at 150.97 to the dollar.
The offshore yuan was almost unchanged at 7.1334 yuan to the dollar.
The British pound rose 0.2% to $1.3007.
cryptocurrency
Bitcoin fell 0.3% to $67,493.66.
Ether fell 0.9% to $2,651.08.
bond
The 10-year Treasury yield rose 1 basis point to 4.21%.
Germany’s 10-year bond yield rose 4 basis points to 2.32%.
The UK 10-year bond yield rose 4 basis points to 4.17%.
merchandise
Brent crude oil fell 0.8% to $73.73 per barrel.
Spot gold rose 0.5% to $2,734.17 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jason Scott, Winnie Hsu, Abhishek Vishnoi, and Aya Wagatsuma.
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