Global Markets Slip Amid Risk Aversion
U.S. stock futures and international equities markets started the week lower and bond yields rose as investors shifted away from risky assets. Comments from Bank of Japan Governor Kazuo Ueda fueled the risk-off mood. Earlier, Ueda said the BOJ will thoroughly discuss the possibility of an interest-rate increase at its mid-December policy meeting as investors fret about the potential impact of fiscal stimulus there.
The dollar eased and bitcoin fell to a one-week low.
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ISM surveys for November for manufacturing later Monday and services on Wednesday and ADP private payrolls figures for November will be closely watched, with any signs of weakness in the job market or economic activity adding to prospects for a Federal Reserve rate cut.
—U.S. futures for the Nasdaq were recently down 0.6%, those for the S&P 500 were down 0.5% and futures for the Dow Jones Industrial Average fell 0.4%. Changes in futures do not necessarily predict movements after the opening bell. The major indexes had closed out the month near record highs partly driven by growing expectations that the Fed will cut interest rates.
—Early in Europe, the Stoxx Europe 600 fell 0.3%, reflecting falls of around 0.5% in major indexes such as France’s CAC 40 and Germany’s DAX. The U.K.’s FTSE 100 lost 0.1%.
—In Asia, Japan’s Nikkei 225 index dropped 1.9% as growing expectations for a rate increase by the Bank of Japan also earlier lifted the domestic yield curve across the board. Chip and real-estate stocks led the declines. At one point, the 10-year Japanese government bond yield was up 7.5 basis points to 1.875%, touching its highest level since June 2008, before easing back. Hong Kong’s Hang Seng climbed 0.7% and South Korea’s Kospi slipped 0.2%.
—U.S. Treasury yields rose late in Asian trade; the two-year Treasury yield was up 0.5 basis point to 3.495% while the 10-year Treasury yield rose 2.1 basis points to 4.039%, according to Tradeweb data. Yields on U.K. government bonds climbed along with their Japanese and eurozone counterparts.
—The dollar fell against a basket of major currencies, with the DXY Dollar Index edging down 0.1% to 99.371 after hitting a two-week low of 99.317 overnight.
—Bitcoin fell, failing to sustain its recent recovery above $90,000. “Bitcoin tends to be a leading indicator for overall risk sentiment right now, and its slide does not bode well for stocks at the start of this month,” XTB’s Kathleen Brooks said in a note. Bitcoin was recently down 5.1% to $86,544 after earlier reaching a one-week low of $85,663, according to LSEG data.
—Oil prices climbed after OPEC+ members decided to leave output steady and as traders monitor geopolitical tensions in Eastern Europe and Venezuela. Brent crude rose 2% to $63.66 a barrel, while WTI was up 2.2% to $59.85 a barrel. Operations at the Black Sea terminal of the Caspian Pipeline Consortium—which exports oil mainly from Kazakhstan—were halted due to damage caused by a Ukrainian drone attack, according to media reports.
—Gold prices were up on a softer U.S. dollar and renewed expectations that the Fed will cut interest rates further this year. New York gold futures were up 0.5% to $4,276.80 a troy ounce, while spot gold gained 1.2% to $4,215.82 an ounce.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
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