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US stock futures slide as treasuries advance

Nov 08 2018 14:30
Natasha Doff, Bloomberg

US stocks looked set to put an end to a global rally that spread across Europe and Asia after the midterm elections. Benchmark Treasury yields retreated from the highest level since 2011.

Futures on the S&P 500 retreated after a surge in the underlying index yesterday. Europe’s main equity gauge pared an earlier advance spurred by strong earnings and dividend outlooks from companies including AstraZeneca and Siemens.

It remained in the green, however, after an upbeat session in Asia. Japan’s Topix jumped 1.7% and shares in Hong Kong and South Korea also posted solid gains.

Italian bond yields climbed after the European Union warned the nation’s budget deficit will move dangerously close to the economic bloc’s limit of 3%. The dollar edged higher.

While the resignation of Attorney General Jeff Sessions has threatened to prolong US political uncertainty after the elections, attention may now shift to Thursday’s Federal Reserve decision. Investors will be looking for any signals on the pace of policy tightening into 2019.

Meanwhile, Chinese trade data showed a surge in exports and imports for October, months before the next round of tariff hikes in the trade war with the US is set to kick in. West Texas oil rose after sliding for eight straight days.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index climbed 0.3%  as of 06:57 New York time, the highest in a month. Futures on the S&P 500 Index declined 0.4%. The MSCI Asia Pacific Index advanced 0.9% to the highest in more than three weeks. The MSCI Emerging Market Index increased 0.3% to the highest in five weeks.

Currencies

The Bloomberg Dollar Spot Index gained 0.1% to 1 198.94, the largest rise in more than a week. The euro dipped 0.1% to $1.1409. The British pound declined 0.2% to $1.3106. The Japanese yen fell 0.2% to 113.71 per dollar, the weakest in almost five weeks.

Bonds

The yield on 10-year Treasuries declined one basis point to 3.22%, the largest fall in a week. Germany’s 10-year yield climbed one basis point to 0.46%, the highest in almost three weeks. The spread of Italy’s 10-year bonds over Germany’s rose four basis points to 2.9322 percentage points.

Commodities

Gold decreased 0.3% to $1 223.23 an ounce, reaching the weakest in more than a week on its fifth consecutive decline. West Texas Intermediate crude increased 0.3% to $61.88 a barrel, the first advance in almost two weeks.

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