Futures, Stocks Decline With Jobs Data in View: Markets Wrap

A trader passes in front of Goldman Sachs Group Inc. signage in front of New York Stock Exchange. (Photographer: Michael Nagle/Bloomberg)


Futures, Stocks Decline With Jobs Data in View: Markets Wrap

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U.S. futures slipped along with European stocks on Monday as traders await fresh catalysts, with the key American jobs data later this week set to provide further clues on the outlook for the world’s biggest economy amid lingering inflation concerns.

Contracts on the S&P 500 and Nasdaq declined, with trading hours curtailed due to the Memorial Day holiday in the U.S. The dollar weakened against a basket of peers. The euro gained after data showed Germany’s inflation rate rose to the highest level since October 2018, while price pick-ups in May were also reported by Spain and Italy. There’s no Treasuries cash trading today, after the 10-year yield closed just below 1.6% on Friday.

The utilities sector dragged the Stoxx Europe 600 index lower as Spain’s Endesa SA declined following reports the Spanish government is preparing to rein in windfall profits for power producers. Deutsche Bank AG dropped after the Federal Reserve warned that its compliance programs aren’t adequate. U.K. markets are closed for a holiday.

Oil climbed as OPEC and its allies forecast that inventories will fall sharply this year if the group sticks to its plan. Gold headed for the biggest monthly advance since July and most industrial metals gained.

Futures, Stocks Decline With Jobs Data in View: Markets Wrap

Global stocks remain near a record, lifted by the ongoing economic recovery from the pandemic and injections of stimulus. The rally has so far weathered concerns that price pressures could force an earlier-than-expected reduction in central bank support. But investors remain sensitive to the risk, and Friday’s U.S. non-farm payrolls report could buffet markets if it changes perceptions of the rebound’s strength.

“Policy makers have committed to accepting a higher level of inflation, higher volatility in inflation and as that happens you will see inflation moving structurally higher,” Mixo Das, JPMorgan Asia equity strategist, said on Bloomberg TV. “I don’t think this is in the prices yet.”

The offshore yuan weakened after China forced banks to hold more foreign currencies in reserve for the first time in more than a decade, its most substantial move yet to rein in the surging currency. Bitcoin rebounded from Friday’s slump to trade above $36,500.

Futures, Stocks Decline With Jobs Data in View: Markets Wrap

Here are key events to watch this week:

  • U.S. markets are closed Monday for the Memorial Day holiday. U.K. markets will be closed for the Spring Bank holiday
  • Reserve Bank of Australia policy decision Tuesday
  • OPEC+ meets to review oil production levels Tuesday
  • Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan speak Wednesday
  • U.S. employment report for May on Friday

These are some of the main moves in markets:

Stocks

  • Futures on the S&P 500 fell 0.2% as of 4:31 p.m. New York time
  • Futures on the Nasdaq 100 dropped 0.2%
  • The Stoxx Europe 600 fell 0.5%
  • The MSCI World index was little changed

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro rose 0.3% to $1.2227
  • The British pound rose 0.1% to $1.4206
  • The Japanese yen rose 0.3% to 109.55 per dollar

Bonds

  • Germany’s 10-year yield was little changed at -0.19%
  • Britain’s 10-year yield was little changed at 0.79%

Commodities

  • West Texas Intermediate crude rose 0.9% to $67 a barrel
  • Gold futures rose 0.2% to $1,910 an ounce

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