(Bloomberg) — Stock futures pointed to modest gains in Europe after chipmakers drove a rally in Asia and yet another record-breaking session in the US.
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Futures contracts for the Euro Stoxx 50 climbed 0.2% as the MSCI Asia Pacific Index rose 1%, lifted by the tech-heavy markets of South Korea and Taiwan. S&P 500 futures were little changed.
Traders pushed the S&P 500 closer to the historic 5,500 mark on Tuesday, betting the potential for Federal Reserve rate cuts will keep fueling the tech industry. Nvidia Corp. became the world’s most-valuable company — topping Microsoft Corp. — to extend this year’s record-breaking surge.
A Bloomberg gauge of the dollar was little changed, after falling in the previous session. There’s no trading of Treasuries globally on Wednesday due to a holiday in the US.
“Tech stock rallies in Taiwan, Korea, and Japan are expected to continue, it’s not just about Nvidia,” said Aisa Ogoshi, a portfolio Manager at JPMorgan Asset Management, said in a Bloomberg TV interview. Apple Inc.’s plans on AI will also benefit its suppliers, she added.
Hong Kong stocks rebounded to lead the gains in the region, while mainland Chinese shares slipped as traders digested speeches at the Lujiazui Forum, where securities regulator chief Wu Qing and People’s Bank of China Governor Pan Gongsheng are among the speakers.
“Hong Kong stocks are rising on the back of the Shanghai LJZ forum,” said Billy Leung, an investment strategist at Global X ETFs. “There’s anticipation of positive policies and expectations of reforms for banks regarding shareholder returns. I suspect the policies could be more relevant for Hong Kong-listed shares.”
China’s 10-year bond futures rose to a record intraday high amid a months-long bull run in the country’s debt market. PBOC Governor Pan said the central bank, together with the finance ministry, is studying how to implement government bond trading.
Japan’s bond futures fell after a Bloomberg report that the Ministry of Finance is weighing a plan to shift more of its issuance to shorter-maturity bonds. That would signify a major change as the central bank moves to cut purchases of government debt. The yen edged higher after a four-session slide.
Overnight, Wall Street waded through mixed economic data that showed US industrial production increased, helped by a broad-based pickup in factory output. Separately, retail sales barely rose and prior months were revised lower. A chorus of Fed officials emphasized the need for more evidence of cooling inflation before lowering rates.
“Investors should lean toward the glass-half-full view, but recognize macroeconomic conditions,” said Anthony Saglimbene at Ameriprise.
In corporate news, Norinchukin Bank, Japan’s biggest agricultural bank, said it will diversify its investment portfolio as it braces for massive losses on the sale of roughly 10 trillion yen ($63 billion) in US and European sovereign bonds.
In commodities, oil steadied after closing at a seven-week high as a sustained risk-on mood in wider markets outweighed signs of further stockpile growth. Gold was little changed.
Key events this week:
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UK CPI, Wednesday
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US Juneteenth holiday, Wednesday
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China loan prime rates, Thursday
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Eurozone consumer confidence, Thursday
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UK BOE rate decision, Thursday
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US housing starts, initial jobless claims, Thursday
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Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Friday
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US existing home sales, Conf. Board leading index, Friday
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Fed’s Thomas Barkin speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 2:23 p.m. Tokyo time
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Nasdaq 100 futures rose 0.1%
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Japan’s Topix rose 0.3%
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Australia’s S&P/ASX 200 fell 0.3%
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Hong Kong’s Hang Seng rose 2.1%
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The Shanghai Composite fell 0.4%
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Euro Stoxx 50 futures were unchanged
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0736
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The Japanese yen was little changed at 157.83 per dollar
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The offshore yuan was little changed at 7.2757 per dollar
Cryptocurrencies
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Bitcoin rose 0.8% to $65,429.1
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Ether rose 2.9% to $3,559.36
Bonds
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The yield on 10-year Treasuries was little changed at 4.22%
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Japan’s 10-year yield was little changed at 0.940%
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Australia’s 10-year yield advanced three basis points to 4.18%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi, Shery Ahn, Hooyeon Kim, Matthew Burgess, Alex Gabriel Simon and John Cheng.
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