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Sunday, October 17, 2021

Futures drop with cryptocurrencies amid crackdown: Markets wrap

Bitcoin fell about 4.5%. The dollar and gold rose, while oil was little changed.

By: Bloomberg |
Updated: September 24, 2021 5:06:14 pm
Image: Bloomberg

US futures fell with cryptocurrencies and related stocks after the Chinese central bank said such transactions are illegal. Sovereign bond yields fluctuated after an earlier selloff fueled by the prospect of tighter monetary policy.

Consumer and retail shares led declines both in US pre-market trading and in Europe, with Nike Inc. down almost 5% after lowering its sales outlook amid factory closures. EQT AB, Europe’s biggest listed private equity firm, fell after Sweden’s financial watchdog opened an investigation into suspected market abuse.

Meanwhile, the debt crisis at China Evergrande Group kept traders on edge, with European banks trying to reassure investors that they have limited exposure.

UK 10-year yields were little changed after opening at the highest since March 2020 on expectations for the Bank of England to raise interest rates as soon as November. With central banks from Washington to London this week signaling more alarm over faster inflation, the ultra-stimulative path of the euro area and some of its neighbors appears lonelier than ever.

Bitcoin fell about 4.5%. The dollar and gold rose, while oil was little changed.

Source: Bloomberg

Central banks have pledged to withdraw stimulus gradually, but a continuing rise in long-term borrowing costs could risk denting confidence in recovery prospects.

Clarity from the Federal Reserve has allowed risk assets to flourish, Elaine Stokes, a portfolio manager at Loomis Sayles & Co., told Bloomberg Television, adding that “what they did is tell us that they feel really good about the economy.”

While the bond selloff vindicated Treasury bears who argue yields are too low to reflect fundamentals, others see limits to how high they can go.

“We’d expected bond yields to go higher, given the macro situation where growth is still very strong,” Sylvia Sheng, global multi-asset strategist with JPMorgan Asset Management, said on Bloomberg Television. “But we do stress that is a modest view, because we think that upside to yields is still limited from here given that central banks including the Fed are still buying bonds.”

In Asia, Japan led a second-day increase in MSCI Inc.’s Asia-Pacific index, while stocks were muted in China and Hong Kong. India’s S&P BSE Sensex topped the 60,000 level for the first time on Friday on optimism that speedier vaccinations will improve demand for businesses in Asia’s third-largest economy.

Here are the main moves in markets:

Stocks

Futures on the S&P 500 fell 0.4% as of 6:16 a.m. New York time
Futures on the Nasdaq 100 fell 0.5%
Futures on the Dow Jones Industrial Average fell 0.3%
The Stoxx Europe 600 fell 0.9%
The MSCI World index rose 1%

Currencies

The Bloomberg Dollar Spot Index rose 0.2%
The euro was little changed at $1.1733
The British pound fell 0.1% to $1.3702
The Japanese yen was little changed at 110.41 per dollar

Bonds

The yield on 10-year Treasuries declined two basis points to 1.41%
Germany’s 10-year yield advanced two basis points to -0.24%
Britain’s 10-year yield was little changed at 0.91%

Commodities

West Texas Intermediate crude was little changed
Gold futures rose 0.3% to $1,754.20 an ounce

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