European stocks and US futures fluctuated in early Tuesday trading, and the Australian dollar jumped after a surprise interest rate increase by Australia’s central bank.
(Bloomberg) — European stocks and US futures fluctuated in early Tuesday trading, and the Australian dollar jumped after a surprise interest rate increase by Australia’s central bank.
Technology shares weighed on the Stoxx 600 Index, following a retreat in the US after Apple Inc. unveiled its new mixed-reality headset at a steep price. Asian equities rose, helped by a rally in Chinese developers on bets of further policy support.
The Australian dollar gained as much as 1% and the policy-sensitive three-year government note yield was around six basis points higher after the Reserve Bank of Australia said inflation was still too high and tightener monetary policy may be required.
“The message from today is the same for all central banks: combating generational high levels of inflation will be an ongoing challenge,” said John Bromhead, a strategist at ANZ Banking Group Ltd.
In commodity markets, wheat surged after Ukraine said Russian forces blew up a giant dam in the country’s south, unleashing a torrent of floodwater that threatens thousands of people and poses a potential threat to Black Sea grain supplies. Prices jumped as much as 3% on Tuesday, extending their climb from a 30-month low last week.
The dam’s destruction “looks like a big escalation with dire consequences and huge headline risk,” Andrey Sizov, managing director at agricultural consultant SovEcon, said in a tweet. “This could be just the start of the bull run.”
Meanwhile, the dollar weakened against all of its Group-of-10 peers. The US Treasury on Monday began its bill issuance flood that saw buyers storming into the upsized three- and six-month auctions, a move that many have expected will drain liquidity from the system.
Any move by the government or the Fed that can risk liquidity in the system “is something that will probably keep us in a range-bound mode until we see where it all lands, including the Fed’s final decision on rates,” Sylvia Jablonski, CEO and chief investment officer at Defiance ETF, said on Bloomberg Television.
Key events this week:
- Rate decision in Poland, Tuesday
- China forex reserves, trade, Wednesday
- US trade, consumer credit, Wednesday
- Canada rate decision, Wednesday
- EIA crude oil inventory data, Wednesday
- Eurozone GDP, Thursday
- Rate decisions in India, Peru, Thursday
- Japan GDP, Thursday
- US wholesale inventories, initial jobless claims, Thursday
- China PPI, CPI, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 was little changed as of 8:33 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures rose 0.2%
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index rose 0.3%
- The MSCI Emerging Markets Index was little changed
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was little changed at $1.0712
- The Japanese yen rose 0.3% to 139.17 per dollar
- The offshore yuan fell 0.2% to 7.1319 per dollar
- The British pound was little changed at $1.2430
Cryptocurrencies
- Bitcoin rose 0.7% to $25,816.67
- Ether rose 0.7% to $1,817.21
Bonds
- The yield on 10-year Treasuries declined one basis point to 3.67%
- Germany’s 10-year yield declined three basis points to 2.35%
- Britain’s 10-year yield declined two basis points to 4.19%
Commodities
- Brent crude fell 1.5% to $75.42 a barrel
- Spot gold fell 0.2% to $1,958.39 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott, Joanna Ossinger, Matthew Burgess and James Poole.
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