European stocks and US futures slid following a strong rally in Asia. The dollar headed for its biggest weekly loss in more than two months on bets that the Federal Reserve is nearing the end of its hiking cycle.
Chemical shares led losses in Europe after a downbeat earnings statement from Croda International Plc. The Turkish lira weakened President Recep Tayyip Erdogan nominated a new central bank governor.
Stocks are finishing a week that saw the S&P 500 start a new bull market. The benchmark has now gained 20% from its October low, joining the Stoxx Europe 600, Germany’s DAX and South Korea’s Kospi in its fifth technical bull market in about three decades.
Traders are looking for signals that might inform the Fed’s upcoming policy meeting next week. Markets were whipsawed during the week by surprise hikes by central banks in Canada and Australia, which raised concerns that the battle against high inflation would persist for longer.
Treasuries were little changed after rising on Thursday. Government bonds gained in Australia and New Zealand.
In Asia, stocks headed for a second weekly gain, with Japan’s Nikkei 225 set to complete a nine-week advance that would be its longest winning streak in more than five years. The index jumped nearly 2% on Friday and South Korean equities climbed to levels last seen a year ago.
Chinese stocks have lagged their Asian and US peers this year amid disappointment over the weakness of the nation’s economic recovery from the pandemic and persistent geopolitical tension with the US. Data Friday showing a decline in producer prices and tepid consumer-price inflation bolstered speculation the government will have to do more to support the economy.
“You need to see a much higher growth rate in China versus the US in order to justify moving back into China given the geopolitical risks and the lack of policy stimulus,” Thomas Taw, head of Asia Pacific iShares investment strategy at BlackRock, said in an interview with Bloomberg Television.
- The Stoxx Europe 600 was little changed as of 8:19 a.m. London time
- S&P 500 futures fell 0.3%
- Nasdaq 100 futures fell 0.2%
- Futures on the Dow Jones Industrial Average fell 0.3%
- The MSCI Asia Pacific Index rose 0.9%
- The MSCI Emerging Markets Index rose 0.7%
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0773
- The Japanese yen fell 0.5% to 139.57 per dollar
- The offshore yuan fell 0.2% to 7.1332 per dollar
- The British pound fell 0.1% to $1.2546
- Bitcoin fell 0.6% to $26,473.61
- Ether fell 1% to $1,834.36
- The yield on 10-year Treasuries advanced three basis points to 3.75%
- Germany’s 10-year yield advanced three basis points to 2.43%
- Britain’s 10-year yield advanced three basis points to 4.26%
- Brent crude fell 0.6% to $75.53 a barrel
- Spot gold was little changed
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