SYDNEY (Sept 10): Asian futures pointed to a mixed start to trading Tuesday after U.S. stocks snapped three days of gains. Sovereign bond yields in the U.S. and Europe rose.
Equity futures were little changed in Japan, dipped in Australia and rose in Hong Kong. S&P 500 futures edged higher in early Asian trading after U.S. stocks that had driven a recent rally such as health-care, tech and real estate weighed on benchmarks.
German bunds led the drop in sovereign debt, with yields on longer-dated notes climbing more than shorter-dated securities, as traders pared back expectations that the European Central Bank will unveil a big stimulus package. Rates on longer-dated Treasury notes climbed more than those on shorter- dated securities, reversing an inversion in the yield curve.
In currencies, the dollar, yen and Swiss franc drifted lower in light trade as fears of a hard Brexit subsided. The euro improved amid news of the potential for additional fiscal spending by Germany.
Investors are biding their time this week ahead of the ECB meeting on Thursday and Federal Reserve gathering next week that will throw light on the path of monetary policy. On the trade front, Treasury Secretary Steven Mnuchin said earlier that the U.S. and China have made “lots of progress” on talks.
Elsewhere, oil advanced after Saudi Arabia’s new energy minister signaled that OPEC and its allies will continue with production cuts, as the group prepares to gather in Abu Dhabi.
Here are some key events coming up this week:
* OPEC’s monthly oil market report, which includes demand forecasts and production estimates, is due Wednesday.
* The ECB policy meeting Thursday is widely expected to see a cut to interest rates and a review of all options, including QE. Policy makers will also publish forecasts for growth and inflation. ECB President Mario Draghi will hold a press conference.
These are the main moves in markets:
* Futures on the Nikkei 225 rose less than 0.1%.
* Australia’s S&P/ASX 200 Index futures fell 0.1%.
* Hong Kong’s Hang Seng Index futures rose 0.3%.
* The S&P 500 Index futures rose 0.1% as of 8:05 a.m. in Tokyo. The index ended little changed Monday.
* The yen was at 107.25 per dollar after falling 0.3%.
* The offshore yuan was at 7.1180 per dollar.
* The Bloomberg Dollar Spot Index was flat.
* The euro traded at $1.1048.
* The pound was at $1.2352 after rising 0.5%.
* The yield on 10-year Treasuries rose eight basis points to 1.64%, the highest in almost four weeks.
* Australia’s 10-year bond yield gained five basis points to 1.08%.
* Germany’s 10-year yield gained five basis points to -0.59%, the highest in a month.
* West Texas Intermediate crude gained 0.5% to $58.13 a barrel.
* Gold was at $1,499.14 an ounce after dropping 0.5%.