U.S. hints at trade truce with China, Treasury yields grind higher, and it’s PMI day. Here are some of the things people in markets are talking about today.
U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China, adding he is “cautiously optimistic” a deal can be reached that would bridge differences over trade. China’s Ministry of Commerce said yesterday that it would welcome such a move. The apparent softening of positions comes as Chinese tech shares remain under pressure in the wake of U.S. sanctions against ZTE Corp. announced last week. Elsewhere in trade, senior officials from the three Nafta signatory countries are set to meet again in Washington as a push to reach an agreement in the coming weeks intensifies.
The yield on the U.S. 10-year Treasury traded as high as 2.9957 percent this morning ahead of a week packed with economic data and new debt supply. The 3 percent level, which was last briefly touched in 2014, is seen by some prominent investors as a line in the sand that would mark the end of the three-decade bull market in bonds. With the rally in commodities stoking inflation concerns and deemed the culprit for the move higher, a rise above 3 percent may not be easy to sustain.
Euro-area purchasing manager data showed that the single-currency bloc continues to grow at a steady pace in April, if somewhat below the levels seen in 2017. In Germany, Purchasing Managers’ Index for manufacturing and services rose to 55.3 from 55.1, IHS Markit said, slightly ahead of expectations, while a similar measure for France showed a rise to 56.9 in April from 56.3 in March. At 9:45 a.m. Eastern Time, manufacturing, services and composite PMIs for the U.S. are due to be published.
Overnight, the MSCI Asia Pacific Index dropped 0.6 percent, while Japan’s Topix index closed little changed with tech stocks the worst performers. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:45 a.m. Eastern Time in a relatively quiet trading session so far. S&P 500 futures were pointing to a lower open, the U.S. 10-year yield continued to flirt with 3 percent and gold was down.
Deals and earnings
Walmart Inc. is close to finalizing a deal to buy a majority stake in Flipkart Online Services Pvt, India’s leading e-commerce company, for at least $12 billion, according to people familiar with the matter. Stars Group Inc., Toronto-based operator of PokerStars, announced the $4.7-billion purchase of Sky Betting & Gaming on Saturday. In earnings, this week sees banks report in Europe, with UBS Group AG getting the ball rolling with a lackluster set of results. In the U.S., Google parent Alphabet Inc. kicks off a huge week for tech earnings today.
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots: Why the entire way we talk about millennials is wrong.
- What global finance chiefs are saying about the world economy.
- How China is buying its way into Europe.
- IMF to probe role of advanced economies in feeding corruption.
- Chinese yield slide may pose greatest danger to emerging markets.
- Donations to NRA’s political action committee surge in March.
- We might be searching for ET all wrong.
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