U.S. Futures Slump With Bonds on Inflation Fears: Markets Wrap

Inflation concerns are rattling investors once again, fueling a selloff in U.S. bonds and sending Nasdaq futures sharply lower in early trading.

Ten-year Treasury yield climbed above 1.7% for the first time since January 2020, and the 30-year rate topped 2.4%. The Nasdaq 100 Index, a benchmark for high-valuation stocks that are sensitive to rising yields, sank 1%.

U.S. equities look poised to reverse some of the gains from Wednesday, when markets hit an all-time high. The Federal Reserve’s apparent willingness to keep pumping support into the economy and let it run hotter has spurred bets on faster growth and inflation, sending market expectations of price pressures to multiyear highs.

“The risk is that central banks will then be left playing catch-up and chasing inflationary pressure, resulting in larger aggregate tightening moves overall at a later stage,” said Simon Ballard, chief economist at First Abu Dhabi Bank.

In Asia and Europe, stocks were boosted by lingering enthusiasm from the Fed’s outlook for stronger growth. Automakers and banks, which tend to outperform during cyclical upswings, led gains in Europe. Japan’s Topix jumped past the 2,000 mark for the first time since 1991, becoming the region’s top-performing major equity index this year.

Elsewhere, oil slipped after U.S. crude stockpiles topped half a billion barrels and the International Energy Agency said global supplies are plentiful. Bitcoin traded around $59,000. The dollar ticked higher.

Japan’s government bond yields rose on a Nikkei report that the Bank of Japan is considering widening the trading range around the 10-year target, which could spur concerns about policy tightening. The Australian dollar outperformed most major currencies on a strong jobs report.

Pagar, Stock Exchange, Economía

These are some key events this week:

Bank of England rate decision Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.

Stocks

Futures on the S&P 500 Index declined 0.3% as of 8:35 a.m. London time.The Stoxx Europe 600 Index climbed 0.2%.The MSCI Asia Pacific Index rose 0.8%.The MSCI Emerging Market Index gained 0.6%.

Currencies

The Bloomberg Dollar Spot Index rose 0.1%.The euro fell 0.2% to $1.1953.The British pound was little changed at $1.3963.The onshore yuan was little changed at 6.503 per dollar.The Japanese yen weakened 0.3% to 109.14 per dollar.

Bonds

The yield on 10-year Treasuries climbed 15 basis points to 1.72%.The yield on two-year Treasuries climbed one basis point to 0.14%.Germany’s 10-year yield gained two basis points to -0.27%.Japan’s 10-year yield increased one basis point to 0.114%.Britain’s 10-year yield rose four basis points to 0.869%.

Commodities

West Texas Intermediate crude dipped 1.1% to $63.89 a barrel.Brent crude declined 1.2% to $67.20 a barrel.Gold weakened 0.4% to $1,737.78 an ounce.