U.S. Futures Drop, Bonds Up on Second-Wave Worries: Markets Wrap

U.S. futures retreated along with Asian shares and the dollar climbed against major peers as investors gauged the danger of a second wave of coronavirus infections.

“The risk is that, globally, we get a second wave,” said Chris Iggo, the chief investment officer for core investments at AXA Investment Managers. “Now is the time to have that long-duration bond exposure in the portfolio.”

China on Monday will report key economic data for May, expected to show a continued improvement after the worlds second-largest economy contracted in the first quarter. Officials moved a press briefing online due to the latest virus outbreak in Beijing.

Stephen Schwartz, Fitch Ratings Head of Asia Pacific Sovereign Ratings, says APAC economic momentum should turn positive in 2H 2020.

Source: Bloomberg

These are some key events coming up:

• Policy decisions from the Bank of Japan, Bank of England and the Swiss National Bank are due this week.

• China on Monday releases industrial production and retail sales data for May.

• CBOE plans to open its trading floor, which has been electronic only since March 16.

• Federal Reserve Chairman Jerome Powell delivers his semi-annual policy report to Congress.

These are some of the main moves in markets:

Stocks

• S&P 500 futures fell 1.2% as of 9:02 a.m. in Tokyo. The S&P 500 advanced 1.3% on Friday.

• Japans Topix index was down 0.4%.

• Kospi Index dropped 0.9%.

• Australias S&P/ASX 200 Index, which tumbled almost 5% the previous two sessions, was down 0.1%

• Hang Seng futures fell 0.5% on Friday.

Currencies

• The yen edged up 0.1% to 107.29 per dollar.

• The offshore yuan slipped 0.2% to 7.0890 per dollar.

• The euro was at $1.1254.

• The Bloomberg Dollar Spot Index rose 0.1%.

Bonds

• The yield on 10-year Treasuries fell about three basis points to 0.67%.

• Australias 10-year yield fell four basis points to 0.87% early Monday.

Commodities

• West Texas Intermediate crude dropped 2.3% to $35.43 a barrel.

• Gold was at $1,733 an ounce, little changed.

— With assistance by Nancy Moran