Bloomberg — The dollar fluctuated in early Monday trade and Asian equities were poised to open lower amid unrelenting pressure on risk-sensitive assets as fears of faster inflation and global recession continue to rise.
The pound led declines among major currencies, falling to a fresh 37-year low as the UK’s fiscal plans added to the challenge for monetary authorities trying to quell price growth. The euro swung between gains and losses as investors weighed the prospect of Italy under the most right-wing government since World War II.
Stock futures fell in Japan, Hong Kong and Australia in the wake of a another rocky session in the US on Friday, when the S&P 500 slid to a new intraday low for the year. Underscoring the concern in markets, Cboe Volatility Index that serves as a “fear gauge” for Wall Street jumped to a three-month high.
The trading week will be punctuated by a number of economic reports including US initial jobless claims and gross-domestic-product data, along with PMI figures from China. Choppiness in price moves is likely with a steady stream of Federal Reserve officials speaking through the week.
“We’re in a period of global gloom, with pessimism blanketing different countries for different reasons,” said Ed Yardeni, president of his eponymous research firm, who warned of growing storm clouds for the U.S. economy. “The latest data jibe with our growth recession scenario, but the risks of a full-blown recession are obviously increasing,” he wrote in a note on Monday.
Adding to the bleak outlook, Goldman Sachs Group Inc. slashed its target for US stocks at the end of last week, warning a dramatic upward shift in the outlook for rates will weigh on valuations.
Treasury yields remain elevated, with the two-year US rate climbing for 12 straight days through Friday in longest such streak since at least 1976.
Oil inched higher early Monday while trading below $80 a barrel and holding most of its recent losses amid heightened fears over a hard economic landing. Gold was little changed and Bitcoin stayed below $19,000.
Key events this week:
- Fed officials speaking at events include Boston Fed’s Susan Collins, Atlanta Fed’s Raphael Bostic, Cleveland Fed’s Loretta Mester, Monday
- ECB President Christine Lagarde appears before the European Parliament, Monday
- China industrial profits, Tuesday
- US new home sales, Conference Board consumer confidence, durable goods, Tuesday
- Fed Chair Jerome Powell, Chicago Fed’s Charles Evans to speak at events, Tuesday
- San Francisco Fed’s Mary Daly, Atlanta Fed’s Rafael Bostic, Chicago Fed’s Charles Evans and ECB President Christine Lagarde speak at events, Wednesday
- Euro zone economic confidence, consumer confidence, Germany CPI, Thursday
- US initial jobless claims, GDP, Thursday
- Cleveland Fed’s Loretta Loretta Mester, San Francisco Fed’s Mary Daly speak at events, Thursday
- China PMI, Friday
- Euro zone CPI, unemployment, Friday
- UK GDP, Friday
- US consumer income , University of Michigan consumer sentiment, Friday
- Fed Vice Chair Lael Brainard and New York Fed’s John Williams speak at conference, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 7:25 a.m. in Tokyo. The S&P 500 fell 1.7% on Friday
- Nasdaq 100 futures fluctuated. The Nasdaq 100 dropped 1.7%
- Nikkei 225 futures slipped 2.3%
- Australia’s S&P/ASX 200 Index futures declined 1.3%
- Hang Seng Index futures fell 1.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed Monday
- The euro rose 0.1% to $0.9700
- The yen traded at 143.35 per dollar
- The pound fell 0.3% to $1.0826
- The offshore yuan was at 7.1326 per dollar
Cryptocurrencies
- Bitcoin (BTC) traded at $18,866.71
- Ether gained 0.4% to $1,297.68
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.68% on Friday
Commodities
- West Texas Intermediate crude rose 0.8% to $79.39 a barrel on Friday
- Gold traded at $1645.44 an ounce
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