(Bloomberg) — Stocks and European equity futures fell Friday after U.S. shares slid from a record, with Treasury yields hovering around the highest levels in over a year as concerns about faster inflation rattled investors.
China’s CSI 300 share gauge slumped as chilly U.S.-China talks soured the mood. Japan’s Topix rallied and the Nikkei 225 sank after the Bank of Japan said it will focus purchases of exchange-traded funds on the former gauge. European contracts retreated and U.S. equity futures fluctuated after the Nasdaq 100 slid 3.1% and the S&P 500 fell 1.5%.
U.S. Treasury yields steadied after a spike drove the 10-year benchmark to 1.75% for the first time since January 2020. Crude prices added to a 7% plunge that owed partly to concerns that new virus-related curbs in Europe will sap demand. The dollar held most of its gains from the prior day.
The Bank of Japan’s policy decision also included specifying a flexible trading band of 25 basis points either side of its 0% target for the 10-year yield.
Federal Reserve Chair Jerome Powell’s willingness to let the U.S. economy run hotter with central bank support has spurred bets on faster inflation, sending market expectations of price pressures to multi-year highs. Across the Atlantic, France announced a lockdown of areas including Paris to fight the pandemic, casting a cloud over Europe’s outlook amid an uneven vaccine roll out.
“Economic recovery is on its way and we have central banks around the world very committed to easy monetary policy,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners, who sees value stocks benefiting. “All of that together will indicate this is just short-term profit-taking and the underlying fundamentals of the equity market are looking very strong.”
Traders were also bracing for quadruple witching Friday, a major expiration of options and futures contracts that can exacerbate swings in asset prices. Elsewhere, a number of European nations will start using AstraZeneca Plc’s Covid-19 vaccine again after Europe’s drug regulator declared it safe.
These are some of the moves in markets as of 7:02 a.m. in London:
Stocks
S&P 500 futures added 0.1%, after the benchmark closed down 1.5%.Nasdaq 100 Index futures rose 0.2%. The index fell 3.1%.China’s CSI 300 Index fell 2.6%.Hong Kong’s Hang Seng Index slipped 2.2%Japan’s Topix Index added 0.2%.Japan’s Nikkei 225 Index fell 1.4%.Australia’s S&P/ASX 200 Index fell 0.6%.Euro Stoxx 50 futures slid 0.8%
Currencies
The yen was at 108.82 per dollar, up 0.1%.The offshore yuan was at 6.5104 per dollar.The Bloomberg Dollar Spot Index fell less than 0.1%.The euro was at $1.1921.
Bonds
The yield on 10-year Treasuries dipped one basis point to 1.69%.Australia’s 10-year yield was about two basis points higher at 1.80%.
Commodities
West Texas Intermediate crude fell 0.9% to $59.47 a barrel.Gold slipped 0.2% to $1,740.55 per ounce.
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