Wednesday, January 19

US Futures Choppy Amid Covid Caution


Global stocks rose modestly, while US index futures fluctuated between gains and losses, as investors evaluated the prospects for economic recovery and awaited the latest minutes from the Federal Reserve to gauge the direction of monetary policy.

Contracts in the S&P 500 index fell less than 0.1% after the underlying gauge fell to the most in four weeks on Tuesday. The dollar stopped a two-day rally and Treasury yields were stable. Oil rebounded from a four-day slump, a US industry report pointed to another drop in domestic crude stocks.

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A sense of caution was visible in the markets, with most assets posting small movements, amid the relentless spread of the delta virus variant, the prospect of reduced stimulus support and high inflation. While Wednesday’s Fed minutes may give some clues about the timeline for reducing stimulus, the next catalyst for markets may not arrive before the August 26-28 central bank conference in Jackson Hole, Wyoming. .

“The market remains cautious,” strategists at Mizuho International Plc, including Peter Chatwell, wrote in a note. Unless the Fed minutes “reveal something substantially different from the stories from recent sources, the market is unlikely to react significantly and choppy trading may continue.”

At a town hall meeting Tuesday, Fed Chairman Jerome Powell noted that the pandemic “still casts a shadow over economic activity,” but did not discuss the outlook for monetary policy or details on growth and financial returns. delta variant risks.

European stocks changed little as Covid risks continued to weigh on the economic outlook. The British pound rose 0.1% against the US dollar after data showed that UK inflation fell to the Bank of England’s 2% target in July.

West Texas Intermediate crude rose for the first time in five days. The American Petroleum Institute’s report that inventories fell last week overcame concerns about the impact of the pandemic on demand.

Bitcoin advanced after two days of losses and traded around $ 45,200 each.

Here are some events to watch this week:

  • FOMC Minutes Released Wednesday
  • Bank of Indonesia interest rate decision and Governor Perry Warjiyo briefing on Thursday

Some of the main movements in the markets:

Stocks

  • The Stoxx Europe 600 was little changed at 8:33 am London time
  • S&P 500 futures changed little
  • Nasdaq 100 futures changed little
  • Dow Jones Industrial Average futures fell 0.2%
  • The MSCI Asia Pacific Index rose 0.4%
  • The MSCI emerging markets index rose 0.4%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro was up 0.2% to $ 1.1728.
  • The Japanese yen changed little to 109.55 per dollar
  • The offshore yuan rose 0.1% to 6.4820 to the dollar.
  • The British pound changed little at $ 1.3749

Captivity

  • The 10-year Treasury yield changed little to 1.26%.
  • Germany’s 10-year yield fell one basis point to -0.48%.
  • The UK 10-year yield fell two basis points to 0.54%.

Raw Materials

  • Brent crude rose 0.8% to $ 69.56 a barrel
  • Spot gold rose 0.4% to $ 1,793.44 an ounce

© 2021 Bloomberg


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