- Europe to debate more stringent sanctions on Russia
- Traders awaiting comments from Fed members this week
- Oil price volatility expected
Key Events
On Monday, futures on the Dow Jones, S&P 500, NASDAQ 100 and Russell 2000 were marginally higher despite increased worries that the US and Europe may introduce more stringent sanctions on Russia following accusations of war crimes as Russian forces withdraw from parts of Ukraine.
The oil price wavered on a surprise 2-month truce in the Yemen war.
Global Financial Affairs
US futures turned lower in the final hour of the Asian session and this slide increased in velocity with the European open but they recovered and are trading in positive territory
In Europe, the STOXX 600 Index followed a similar pattern, opened up, stumbled lower and then recovered. Healthcare stocks led the gainers as Roche Holding (SIX:RO) jumped over 2% to test its Nov. 4 record. Demand surged after the US Food and Drug Administration granted a priority review to the Swiss drugmaker's coronavirus drug, Actemra/RoActemra.
Asian shares continued to rally after Friday's rebound on Wall Street. Australia's ASX 200 and South Korea's KOSPI outperformed, rising 0.3% and 0.7% respectively. China's market was closed due to a holiday.
At the end of trading on Friday, US stocks bounced off Friday lows as Treasuries were sold off. The US jobs report supported the argument for faster tightening by the US Federal Reserve in order to manage spiralling inflation. Traders will be closely watching comments from a number of members of the Federal Reserve this week including Minneapolis Fed President Neel Kashkari, New York Fed President John Williams, Fed Governor Lael Brainard, and St. Louis Fed President James Bullard.
The Russell 2000 outperformed even though small firms find it more difficult to compete with the growth rate of large multinationals which have more resources to navigate rising US interest rates.
Yields on the 10-year Treasury note rebounded from an initial dip on the prospect of Fed interest rate hikes.
Yields are trading along with a falling flag, bullish after the preceding sharp rise.
The dollar extended its gain for the third day.
The pattern is extending its range following an H&S continuation pattern. An upside breakout of the Rectangle would confirm the underlying rising trend.
Gold was slightly higher despite a strengthening dollar.
From a technical perspective, the yellow metal may be solidifying an H&S top.
Bitcoin edged lower within a congested trade.
The cryptocurrency has been stuck, having reached a crossroad of buyers and sellers. Bulls have been attempting to create a bottom that faces a much larger H&S top.
Oil was volatile and marginally higher, as traders try to decide the effect of multiple conflicting forces—concerns around falling demand from China, the world's largest importer, due to ongoing coronavirus lockdowns, as well moves by the US and UK to tap into emergency oil reserves and increase supplies are both impacting the price.
The price continued to trade along with a symmetrical triangle.
Up Ahead
- On Tuesday, the Reserve Bank of Australia rate decision.
- US ISM non-manufacturing PMI data is published on Tuesday.
- On Wednesday, the US Federal Reserve releases the minutes from its last meeting.
Market Moves
Stocks
- The STOXX 600 was little changed
- Futures on the S&P 500 fell 0.1%
- Futures on the NASDAQ 100 fell 0.1%
- Futures on the Dow Jones Industrial Average fell 0.1%
- The MSCI Asia Pacific Index rose 0.8%
- The MSCI Emerging Markets Index rose 1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1035
- The Japanese yen was up 0.2% at 122.69 per dollar
- The offshore yuan was up 0.2% at 6.3756 per dollar
- The British pound fell 0.1% to $1.3103
Bonds
- The yield on 10-year Treasuries advanced one basis point to 2.39%
- Germany's 10-year yield declined one basis point to 0.55%
- Britain's 10-year yield fell one basis point to 1.60%
Commodities
- Brent crude rose 0.18% to $104.58 a barrel
- Spot gold rose 0.2% to $1,928.95 an ounce