As most Asian markets were closed, Japanese and Australian stocks rose in thin trading, while US stock futures were flat as investors awaited news of a proposal for First Republic Bank.
Futures contracts for the Hang Seng Index also advanced, despite the fact that Hong Kong will be closed for trading on May 1 along with China, Singapore, and many European nations to observe holidays.
Following Friday’s 0.8% increase for the S&P 500, which capped two consecutive weekly gains for the first time in a month, US futures movements were muted. In addition, the benchmark posted consecutive monthly gains for the first time in five months. The CBOE Volatility Index dropped below 16 points for the first time since November 2021 on the back of strong corporate earnings.
However, the future of First Republic Bank weighed on the markets. After requesting a group of banks, including JPMorgan Chase & Co. and PNC Financial Services Group Inc., to submit proposals for the troubled lender, regulators worked late Sunday evening in Washington.
Following a Friday rally, the price of U.S. Treasuries declined marginally. New Zealand 10-year bonds rose while Australian 10-year bonds remained unchanged. While the yen weakened, the U.S. and Australian dollars strengthened. After a stellar run this year, Bitcoin’s abrupt decline pushed the cryptocurrency’s price below $30,000.
This week, interest rate decisions will be the focal point. The Federal Reserve is anticipated to raise interest rates by 25 basis points to a range between 5 and 5.25 percent, a level not seen since 2007. It is also anticipated that the European Central Bank will increase its main lending rates by 25 basis points. On Tuesday, the Reserve Bank of Australia is expected to maintain interest rates unchanged.
In an interview with Bloomberg Television, Hebe Chen, an analyst at IG Markets, stated, “Earnings season demonstrates that market demand, which is a key driver of inflation, remains quite robust.” The Fed must also play down the likelihood that interest rates will fall later this year, “potentially putting a cap on the unrealistic expectations for a rate cut,” as she put it.
Apple Inc. leads a busy earnings week that also includes Advanced Micro Devices Inc. and Ford Motor Co. In Asia, banks such as HSBC Holdings Plc and Macquarie Group Ltd. will disclose their earnings. Volkswagen AG and the energy titans BP Plc and Shell Plc are on the agenda in Europe.
Elsewhere, both oil and gold prices declined.
Stocks
- Futures on the S&P 500 were relatively unchanged as of 11:37 a.m. Tokyo time. The S&P 500 advanced 0.8%. Friday
- Futures on the Nasdaq 100 were little changed. The Nasdaq 100 increased by 0.7%. Friday
- Hang Seng futures rose 1%
- The Topix gained 0.6%
- Australia’s S&P/ASX 200 rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index increased 0.1 percent.
- 0.1% decline in the euro to $1.1006
- The Japanese yen fell 0.4% against the dollar to 136.78.
- The offshore yuan fell 0.3% to 6.9472 dollars per unit.
Cryptocurrencies
- Bitcoin fell 2.4% to $28,637.34
- Ether decreased by 2.5% to $1,846.41
Bonds
- The yield on 10-year Treasury securities increased by three basis points to 3.45%
- Australia’s 10-year bond yield was unchanged at 3.33 percent.
Commodities
- West Texas Intermediate crude decreased by 0.8% to $76.17 per barrel.
- The spot price of gold decreased 0.3% to $1,983.44 per ounce.