Saudi Arabia and Russia lift oil prices, global cyber-attack abating, and China gobbles up U.S. debt. Here are some of the things people in markets are talking about.
Nine More Months
West Texas Intermediate futures rose as much as 3.8 percent after energy ministers from Saudi Arabia and Russia said agreed-upon production curbs from OPEC and other major oil producers should be extended through the first quarter of 2018. Crude’s advance may have caused some consternation in the hedge fund community: This group recently unwound the bullish bets they placed on an oil rally since the OPEC deal was reached last year. Petrocurrencies fared well, as the Canadian dollar was the best-performing G10 currency after positioning data released last week showed a record number of loonie bears.
The worst of this ransomware attack looks to have passed. European authorities claim the number of infected computers doesn’t look to be increasing, while U.K. politicians said the overwhelming majority of companies affected by the malware had returned to normal operations. However, experts warn that governments should be on alert for a potential wave of these kinds of attacks. One reason why the hackers may not have gotten all they bargained for in ransom payments? Using bitcoin is hard. Meanwhile, a flight to cyber-safety saw companies that provide software security services advance on Monday.
Quantitative Tightening in Reverse
China boosted its holdings of U.S. debt by $27.9 billion in March, according to a monthly report from the Treasury Department released on Monday. Belgium, often seen as an additional proxy for Chinese demand for Treasuries, saw its holdings rise to $109 billion. These purchases help reverse the increasing domestic dominance of the U.S. Treasury market and allay fears of risk appetite potentially being dented by Chinese sales of American debt. That kind of sentiment reportedly contributed to the carnage in equities following the shock devaluation of the yuan in August 2015. Chinese reserves have risen for three consecutive months through April.
The S&P 500 Index and Nasdaq Composite Index posted fresh records, with materials, financials, and energy stocks rising the most. Homebuilders rallied more than 1 percent amid optimism demand will keep picking up. With the U.S. dollar in retreat and Treasury yields edging higher, the risk-on sentiment spanned asset classes Monday.
Yen Down, Futures Up
The Japanese yen was the weakest G10 currency Monday, offering a tailwind for Japanese equities. Indeed, Nikkei 225 and S&P/ASX equity futures are pointing to a higher open on Tuesday as of 5:30 a.m. Tokyo time. Asian shares rose to open the week as President Xi Jinping’s enormous spending plans outweighed largely soft readings on economic activity for April.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Fed officials wonder if hiking rates will protect the poor.
- Asian buyers hungry for beef deals in locales where cows outnumber people.
- Chinese tourists fuel a boom in cruises.
- The analyst who long championed Tesla downgrades the stock.
- This Carribbean bank wants the Chinese money no one else will take.
- Putin blames U.S. political uncertainty for global economic lethargy.
- The Fyre Festival was doomed by debt before it started.