(Bloomberg) — Treasuries were flat after a sell-off on Monday, while stock futures edged lower as traders speculated on the path of U.S. interest rates.
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US futures retreated 0.2%, with the S&P 500 set for its first back-to-back decline in six weeks. Europe’s Stoxx 600 posted little moves. The yield on 10-year Treasuries added one basis point to 4.21% after yesterday’s 11 basis point rise. The dollar changed little.
Bonds fell on Monday as investors scaled back expectations for Fed interest rate cuts after central bank officials signaled a willingness to cut rates at a slower pace. Additionally, traders are weighing the inflationary impact of a potential Donald Trump presidential victory, with his promised tax cuts and trade tariffs ultimately leading to faster price growth and higher rates.
“It’s very clearly tied to a Republican victory on trade — and therefore an agenda that’s more pro-inflationary than the Democrats. We’re in the market betting on Trump,” said Christopher Dembig, senior investment adviser at Pictet Asset Management. “Yield rises are starting to threaten equity markets.” “
Bonds sold off across the board as traders reconsidered the Fed’s path
Gold rose as traders focused on geopolitical risks, including conflicts in the Middle East and the US election – nearing record levels on Monday. Oil fell after rising nearly 2% on Monday.
Pictet’s Dembik noted that the pressure on stocks from the bond market comes with Europe in the midst of a falling earnings season. So far, about 47% of MSCI Europe companies have reported lower-than-expected results, according to data compiled by Bloomberg Intelligence.
Company Highlights:
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Germany’s SAP rose as much as 5.6% in the third quarter after delivering a bump in several key metrics and raising some elements of its guidance for the full year.
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Shares of Hyundai Motor India Ltd fell on Tuesday in Mumbai after the company raised $3.3 billion in the country’s largest initial public offering. Tokyo Metro Co. and Horizon Robotics Inc. IPOs were met with strong demand.
Highlights of this week:
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The ECB’s Christine Lagarde was interviewed by Bloomberg TV on Tuesday
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The BOE’s Andrew Bailey and the ECB’s Klaus Knott and Robert Holzmann are scheduled to speak at the Bloomberg Global Regulatory Forum in New York on Tuesday.
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Philadelphia Fed President Patrick Harker speaks on Tuesday
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Canada rate decision, Wednesday
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Eurozone consumer confidence, Wednesday
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US existing home sales, Wednesday
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Boeing, Tesla, Deutsche Bank Earnings, Wed
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Fed’s Beige Book, Wednesday
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US New Home Sales, Jobless Claims, S&P Global Manufacturing and Services PMI, Thursday
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UPS, Barclays earnings, Thursday
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The Fed’s Beth Hammock speaks Thursday
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American Durable Goods, University of Michigan Consumer Sentiment, Friday
Some key movements in the markets:
Shares
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The Stoxx Europe 600 was down 0.1% as of 8:50 a.m. London time.
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S&P 500 futures fell 0.2%
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Nasdaq 100 futures fell 0.3%
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Futures for the Dow Jones industrial average fell 0.2%
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The MSCI Asia Pacific index fell 1%
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The MSCI emerging market index fell 0.4%
Coins
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.2% to $1.0834
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The Japanese yen was little changed at 150.97 per dollar
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The maritime yuan was little changed at 7.1334 per dollar
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The British pound was up 0.2% at $1.3007
Cryptocurrencies
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Bitcoin fell 0.3% to $67,493.66
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Ether fell 0.9% to $2,651.08
Bonds
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The yield on 10-year Treasuries edged up a basis point to 4.21%.
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Germany’s 10-year yield rose four basis points to 2.32%
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Britain’s 10-year yield rose four basis points to 4.17%
materials
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Brent crude fell 0.8% to $73.73 a barrel
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Spot gold rose 0.5% to $2,734.17 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Jason Scott, Winnie Hsu, Abhishek Vishnoi and Aya Wakatsuma.
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