Riptide Lashes U.S. Stock Futures as Europe Rises

EghtesadOnline: Global equity markets remained fragile on Wednesday, with U.S. stock futures falling, European gauges rising and Asian shares paring a gain as measures of volatility hovered at double their levels of two weeks ago. Treasury yields eased and crude slipped.

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07 February 2018

Traders hoping for stability instead saw futures on the Dow Jones Industrial Average swing in a 360-point range, while the MSCI Asia Pacific Index almost completely erased a gain of as much as 2.4 percent. The March contract on the S&P 500 was down 0.3 percent after earlier falling as much as 1.25 percent, and the Cboe Volatility Index stood at 29.44, little changed from yesterday.

According to Bloomberg, markets from Europe to Japan tumbled into oversold territory after the rout of the past week, which was triggered by rising bond yields and the prospects for a return of inflation and subsequent tighter monetary policy. Amid a slew of calls to “buy the dip,” investors will be watching Wednesday’s auction of 10-year Treasuries for clues on where markets go from here.

Elsewhere, oil gave up earlier gains and Bitcoin edged higher, rising above $8,000.

Here are some key events scheduled for this week:

Monetary policy decisions are due this week in Russia, Brazil, Poland, Romania, the U.K., New Zealand, Serbia, Peru and the Philippines.

Earnings season continues with reports from Philip Morris, Tesla, Rio Tinto, L’Oreal and Twitter.

New York Fed President William Dudley and Dallas Fed President Robert Kaplan are among policy officials due to speak.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index increased 1 percent as of 7:42 a.m. New York time, the first advance in more than a week and the largest climb in more than seven weeks.

Futures on the S&P 500 Index dipped 0.3 percent.

The MSCI Asia Pacific Index advanced 0.1 percent.

The U.K.’s FTSE 100 Index climbed 1.1 percent, the first advance in more than a week and the biggest increase in seven months.

The MSCI Emerging Market Index climbed 0.1 percent, the first advance in a week.

Currencies

The Bloomberg Dollar Spot Index advanced 0.1 percent to the highest in more than two weeks.

The euro dipped 0.2 percent to $1.2347, the weakest in more than two weeks.

The British pound sank 0.3 percent to $1.3905, the weakest in almost three weeks.

The Japanese yen climbed 0.2 percent to 109.35 per dollar.

South Africa’s rand declined 0.3 percent to 11.9538 per dollar.

The MSCI Emerging Markets Currency Index advanced 0.3 percent, the first advance in a week.

Bonds

The yield on 10-year Treasuries fell one basis point to 2.79 percent.

Germany’s 10-year yield increased four basis points to 0.73 percent.

Britain’s 10-year yield climbed two basis points to 1.542 percent.

Commodities

West Texas Intermediate crude dipped 0.5 percent to $63.06 a barrel, the lowest in more than four weeks.

Gold advanced less than 0.05 percent to $1,324.20 an ounce.