U.S. Stock Futures Edge Higher; Pound Slips: Markets Wrap

The pound dipped in early trading Monday after a Bank of England official said the central bank is examining a range of unconventional policy tools, including negative interest rates. Asian stock futures pointed to a mixed start and U.S. contracts edged higher.

Sterling was about 0.3% lower against the greenback, with moves muted elsewhere across currency markets. S&P 500 futures opened modestly higher, following last week’s retreat for global shares. Equity futures edged down in Hong Kong, were flat in Japan, while contracts in Australia rose. Crude oil climbed.

On the virus front, New York’s western region and the area around Albany are ready to reopen as new deaths fell to a seven-week low. France reported a rise in fatalities. The U.S. accused China of using airline passengers to spread the virus early in the outbreak.

Global equities are coming off the back of declines last week as the rally from the March lows showed signs of stalling. Record slumps in U.S. retail sales and factory output underscored how hard shutdowns have hit the world’s largest economy, while Chinese data pointed to signs of improvements through April as the economy began to reopen.

Meantime, Federal Reserve Chairman Jerome Powell said the U.S. economy will recover from the coronavirus pandemic, but the process could stretch through until the end of next year and depend on the delivery of a vaccine. Powell also warned separately on Friday of “significant price declines” for stocks and other assets if the coronavirus pandemic takes a turn for the worse.

Japan is probably slipping into a deep recession from its post sales tax increase hangover. Consensus is for first-quarter GDP, due Monday, to shrink 4.5% from the prior three months on an annualized basis, to be followed by a 21.5% plummet in the current period.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 rose 0.3% as of 7:01 a.m. in Tokyo. The S&P 500 rose 0.4% on Friday.
  • Futures on Japan’s Nikkei 225 were flat.
  • Hang Seng futures dipped 0.9%.
  • Futures on Australia’s S&P/ASX 200 Index added 0.6%.

Currencies

  • The yen was little changed at 107.10 per dollar.
  • The offshore yuan held at 7.1312 per dollar.
  • The euro bought $1.0813.
  • The pound fell 0.3% to $1.2078.

Bonds

  • The yield on 10-year Treasuries rose two basis points to 0.64% on Friday.

Commodities

  • West Texas Intermediate crude gained 1.3% to $29.81 a barrel.
  • Gold was at $1,747.21 an ounce.

— With assistance by Jackie Edwards, and Abhishek Vishnoi

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