European equity futures rose with Asian shares after technology earnings bolstered Wall Street. The yen weakened as the Bank of Japan kept its ultra-loose monetary policy settings.
(Bloomberg) — European equity futures rose with Asian shares after technology earnings bolstered Wall Street. The yen weakened as the Bank of Japan kept its ultra-loose monetary policy settings.
Gains for Euro Stoxx 50 futures indicate the benchmark will post a back-to-back daily advance for the first time in two weeks.
Equities advanced in Japan, Australia and China, even as Japanese banks dropped following the BOJ decision. US futures were little changed after the S&P 500 Index rallied 2% on Thursday, its best day since the first week of the year as investors cheered broadly positive earnings reports.
The yen tumbled as much as 0.9% after the BOJ left its ceiling for 10-year bond yields at 0.5% and its short-term policy rate at minus 0.1% in the first meeting under new governor Kazuo Ueda, as most economists forecast. The BOJ also announced a review of its policy that may take up to one-and-a-half years.
The Bank of Japan will adjust its yield-curve control policy at its next meeting in June if not before, said Mark Matthews, head of Asia research for Julius Baer, speaking on Bloomberg Television. “The yen will get stronger against all other currencies including the dollar.”
Treasuries stabilized in Asia after sliding on Thursday when US data showed a surprise increase in inflation pressure during the first quarter. The dollar gained against all of its Group-of-10 peers.
China Banks
In Asia, investors prepared for earnings reports from some of the largest Chinese lenders including Bank of China Ltd., China Citic Bank Corp. and Industrial & Commercial Bank of China Ltd.
Chinese banks are “macro proxy so this year, if China’s GDP is going to have a modest acceleration, bank earnings growth will probably have room for upside as well,” Winnie Wu, China equity strategist for Bank of America Securities, said in an interview with Bloomberg Television.
Thursday’s rally for US equities reflected positive corporate reports from mega-cap tech companies including Meta Platforms Inc., Alphabet Inc. and Microsoft Corp, while Intel Corp. shares advanced in post-market trading after releasing results late Thursday.
“We certainly see big tech do well in earnings but we’re also seeing quite a lot of other companies that are slowing down,” Laila Pence, president of Pence Wealth Management, said on Bloomberg Television.
Read More: US in ‘Worst of Both Worlds’ With High Inflation, GDP Slowdown
The latest batch of US economic data — including a slowdown in US jobless claims — showed the kind of cognitive dissonance investors have been grappling with, said Dana Peterson, chief economist at The Conference Board.
“Typically when you have recessions, the labor market collapses with GDP, and we’re not seeing that,” Peterson said. “We’re probably going to dip into a recession, maybe starting right now in the second quarter, but we really need to see data.”
Elsewhere, Oil headed for a sixth straight monthly decline as slowdown concerns in the US and Asia weighed on the outlook. Gold was little changed, while Bitcoin slipped further below $30,000.
Here are some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 2:48 p.m. Tokyo time. The S&P 500 rose 2%
- Nasdaq 100 futures were little changed. The Nasdaq 100 rose 2.8%
- Japan’s Topix rose 1.1%
- Australia’s S&P/ASX 200 rose 0.3%
- Hong Kong’s Hang Seng rose 0.5%
- The Shanghai Composite rose 0.7%
- Euro Stoxx 50 futures rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.1% to $1.1014
- The Japanese yen fell 0.7% to 134.92 per dollar
- The offshore yuan rose 0.1% to 6.9219 per dollar
Cryptocurrencies
- Bitcoin fell 0.3% to $29,558.48
- Ether was little changed at $1,918.57
Bonds
- The yield on 10-year Treasuries declined two basis points to 3.50%
- Australia’s 10-year yield advanced one basis point to 3.38%
Commodities
- West Texas Intermediate crude rose 0.6% to $75.23 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric and Carly Wanna.
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