US Futures Gain as Dollar Snaps 8-Week Winning Run: Markets Wrap

(Bloomberg) — US equity futures gained Friday while speculation that president-elect Donald Trump will temper his most extreme trade policies drove the dollar to its biggest weekly loss in three months.

The Bloomberg Dollar Spot Index extended a weekly decline to more than 1%, snapping eight weeks of gains as Trump’s pick for his Treasury secretary signalled to traders he may take a more pragmatic approach to tariffs. Scott Bessent’s nomination last week has sapped dollar strength and boosted US stocks and bonds amid optimism for more measured tariffs.

Contracts on the S&P 500 rose 0.3%, pointing to modest gains in Friday’s shortened, post-holiday trading session on Wall Street. The S&P 500 has already risen 5% in November, on course for its strongest month since February, as a handful of tech titans propel a 26% year-to-date gain that has made this among the strongest years this century for US stocks.

Treasury yields fell as cash trading resumed after the Thanksgiving holiday. European stocks were little changed, although miners including Anglo American Plc outperformed, boosted by optimism that China will adopt further measures to stimulate its economy. 

The yen rose to the highest level in more than a month against the greenback, strengthening past 150 for a time. The dollar slipped against major currencies, with an index of greenback strength headed for its first weekly decline in two months. 

Gains for Japan’s currency were helped by Tokyo inflation data that showed prices rose more than expected on a headline basis, but broadly in line with estimates once fresh food and energy were excluded. Swaps market pricing indicates a more than 60% chance the Bank of Japan will raise interest rates when it meets next month.

“Strong Tokyo CPI reading looks to have again supported further strengthening,” said Alan Lau, FX strategist at Malayan Banking Bhd. “With a BOJ December 25 basis point hike looking increasingly likely, we see that USD/JPY would sustainably break below the key 150.00 support and move lower to test the 142.00 level where it had failed to decisively go below in September”

Japan may also delay a decision on raising taxes to help cover increased defense spending, a senior ruling coalition official said.

 

Elsewhere in currency markets, Brazil’s real tumbled to a record low on disappointment over a government plan to cut spending. 

Some investors are also recalibrating their expectations for US inflation and future Federal Reserve interest rate cuts following data released earlier in the week.

In commodities, oil was steady as traders watched for any further clues to OPEC+’s production plans after it delayed a key virtual meeting by four days. Gold rose for a fourth session, though is still on pace to drop for the first month in the past five.

Key events this week:

• Eurozone CPI, Friday
• ECB releases consumer expectations survey for October, Friday
• “Black Friday,” the traditional start of the US holiday shopping rush

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 9:36 a.m. London time
• S&P 500 futures rose 0.3%
• Nasdaq 100 futures rose 0.4%
• Futures on the Dow Jones Industrial Average rose 0.3%
• The MSCI Asia Pacific Index rose 0.2%
• The MSCI Emerging Markets Index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro was little changed at $1.0562
• The Japanese yen rose 0.9% to 150.18 per dollar
• The offshore yuan was little changed at 7.2458 per dollar
• The British pound was little changed at $1.2695

Cryptocurrencies

• Bitcoin rose 1.2% to $96,297.14
• Ether was little changed at $3,571.29

Bonds

• The yield on 10-year Treasuries declined four basis points to 4.22%
• Germany’s 10-year yield was little changed at 2.12%
• Britain’s 10-year yield declined three basis points to 4.25%

Commodities

• Brent crude fell 0.7% to $72.80 a barrel
• Spot gold rose 0.8% to $2,660.10 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Jan-Patrick Barnert and Divya Patil.

©2024 Bloomberg L.P.