Dollar rises, stocks face hurdles due to Fed rates: market results

(Bloomberg) — The dollar rose in Monday morning trading, gaining its third week of gains as hawkish comments from Federal Reserve officials and geopolitical tensions bolstered the dollar’s appeal.

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Stocks in Japan and Australia fell along with US stock futures. The S&P 500 index fell on Friday and fell for the second week.

Futures contracts for Hong Kong fell earlier. Goldman Sachs Group Inc.’s report of a rebound in Chinese stocks came as a counterbalance to the deluge of stock appetite news. Investors in China will also be watching for a possible cut in the country’s key lending rates on Monday.

The dollar’s gains against most of its G-10 peers followed a weekend when tensions between the US and China did not ease. A senior Beijing diplomat called the American response to the balloon he shot down “hysterical” and his colleague Anthony Blinken called his entry into his country’s airspace “irresponsible.” Meanwhile, North Korea conducted a test launch of an intercontinental ballistic missile.

Beyond that, investors are focused on the shifting outlook for interest rates, with traders fully priced in a quarter-point hike in interest rates at the next two Fed meetings after politicians said on Thursday that larger hikes were not out of the question.

Richmond Federal Reserve Bank President Thomas Barkin said Friday he favors a quarter-point rate hike in February to give the central bank “flexibility” in its bid to curb inflation. Fed chief Michelle Bowman said rates need to continue to rise as inflation remains “too high”.

US Treasury futures were virtually unchanged in early Asian trading on Monday. Cash treasuries were closed due to the holiday of the President’s Day.

Looking ahead this week, investors will also be on the lookout for more U.S. consumer comment as Walmart Inc. and Home Depot Inc. publish many retail earnings reports. Further signs of economic resilience could give the Fed more reason to keep rates higher for longer.

In commodities, oil prices edged up slightly after capping the longest streak of daily losses in a year last week. Rising US oil inventories and the prospect of further tightening by the Fed overshadowed gains last week amid signs of improved energy demand in China. The gold slipped.

Key events of this week:

  • Weekly earnings are expected to include: Alibaba, Anglo American, AXA, BAE Systems, Baidu, BASF, BHP, Danone, Deutsche Telekom, Holcim, Home Depot, Hong Kong Exchanges & Clearing, HSBC, Iberdrola, Lloyds Banking Group, Moderna . , Munich Re, Newmont, Nvidia, Rio Tinto, Walmart, Warner Bros Discovery

  • Main lending rates in China, Monday

  • US Financial Markets Closed for Presidents Day Monday

  • PMI for Japan, Eurozone, UK, US, Tuesday

  • US Existing Home Sales Tuesday

  • US MBA Mortgage Applications Wednesday

  • Federal Reserve Minutes January 31 to February. 1 political meeting, Wednesday

  • Eurozone consumer price index, Thursday

  • US GDP, Initial Jobless Claims, Thursday

  • Atlanta Fed President Rafael Bostic Speech, Thursday

  • G-20 finance ministers and central bank governors meet in India from Thursday to Friday.

  • Japanese CPI Friday

  • Bank of Japan gubernatorial candidate Kazuo Ueda to appear before Japan’s lower house on Friday

Some of the major movements in the markets are:

Stock

  • S&P 500 futures fell 0.3% as of 9:20 am Tokyo time. The S&P 500 closed 0.3% lower on Friday.

  • Nasdaq 100 futures fell 0.3%. The Nasdaq 100 closed 0.7% lower on Friday.

  • The Japanese Topix index fell 0.1%.

  • The South Korean Kospi Index fell 0.8%.

  • Australian S&P/ASX 200 fell 0.2%

  • Hong Kong Hang Seng futures fell 0.6%

Currencies

  • The Bloomberg Spot Dollar Index rose 0.1%.

  • The euro fell 0.2% to $1.0678.

  • The Japanese yen fell 0.1% to $134.35 per dollar.

  • The offshore yuan was little changed at 6.8787 per dollar.

  • The Australian dollar fell 0.2% to $0.6865.

Cryptocurrencies

  • Bitcoin fell 0.6% to $24,397.78.

  • Ether fell 0.2% to $1,683.78.

Bonds

Goods

  • West Texas Intermediate crude rose 0.2% to $76.49 a barrel.

  • Spot gold fell 0.2% to $1,837.91 an ounce.

This story was produced with the assistance of Bloomberg Automation.

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