(Bloomberg) — U.S. equity futures and global stocks rallied, while Treasuries stabilized in a sign of confidence after last week’s bond market turmoil.
S&P 500 futures jumped and European stocks notched broad-based gains. Benchmark Treasury yields fluctuated around 1.40%, while Australia’s 10-year yield slid the most in a year after the central bank doubled down on bond purchases to pacify fixed-income markets. Commodities rose as oil topped $62 a barrel in New York.
Bonds and equity markets have steadied after central banks from Asia to Europe sought to reassure investors that policy support remains in place. The prospect of faster growth and inflation amid a stimulus-fueled recovery from the pandemic led to concerns that officials will eventually have to contemplate tightening monetary conditions.
“With a lot of the move in yields due to the improving growth outlook and reopening prospects, risk appetite is holding up,” said Esty Dwek, head of global strategy at Natixis Investment Manager Solutions. “The pace and scale of the move in yields is more important than the absolute level, suggesting that as long as the move is gradual, risk assets should be able to absorb them.”
In the U.S., President Joe Biden called on lawmakers to quickly approve his $1.9 trillion Covid-19 fiscal aid package, which passed the House of Representatives early Saturday and heads to the Senate. Stimulus and positive vaccine news, including U.S. approval for Johnson & Johnson’s one-shot inoculation, are driving so-called reflation bets.
Elsewhere, most base metals rebounded following Friday’s slump. Bitcoin was trading at around $46,000, nursing losses after its worst weekly plunge in almost a year.
There are some key events to watch this week:
Reserve Bank of Australia sets monetary policy Tuesday.U.S. Federal Reserve Beige Book is due Wednesday.OPEC+ meeting on output Thursday.Fed Chair Jerome Powell to discuss the economy at a Wall Street Journal event on Thursday.The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.
These are some of the main moves in markets:
Stocks
Futures on the S&P 500 Index gained 1.2% as of 8:47 a.m. London time.The Stoxx Europe 600 Index climbed 1.7%.The MSCI Asia Pacific Index gained 1.5%.The MSCI Emerging Market Index advanced 1.2%.
Currencies
The Bloomberg Dollar Spot Index fell 0.1% to 1,134.14.The euro decreased 0.2% to $1.2055.The British pound increased 0.1% to $1.3943.The Japanese yen weakened 0.1% to 106.67 per dollar.
Bonds
The yield on 10-year Treasuries advanced two basis points to 1.42%.The yield on two-year Treasuries dipped less than one basis point to 0.12%.Germany’s 10-year yield dipped four basis points to -0.30%.Britain’s 10-year yield fell four basis points to 0.779%.
Commodities
West Texas Intermediate crude gained 1.6%.Gold strengthened 0.9% to $1,750.53 an ounce.
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