May 22, 2022

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US stock futures rise as oil tumbles

US stock futures rise as oil tumbles

US stock futures rose on Monday amid falling oilTraders were weighing the inflation risks caused by the disruptions in the supply of goods caused by the Russian invasion of Ukraine.

The S&P 500 and Nasdaq 100 contracts both rose as crude oil fell nearly 2%. Investors analyzed diplomatic efforts to address the conflict, as well as comments by a US official that Russia has ordered military equipment from China.

Japan and Hong Kong futures slipped ahead of the latest developments, while Australian futures pointed to a dull start. The drop in Chinese stocks traded in the US last week threatens to undermine sentiment in Hong Kong.

The dollar changed little and the euro rose. The Russian ruble was slightly stronger against the dollar. Gold continued its decline from $2000 an ounce.

The Federal Reserve is expected to start its rate raising cycle on Wednesday with a 25 basis point move.In order to control price pressures. Inflation was already high before the fighting and the isolation of resource-rich Russia, in response, driving up commodity costs.

The flattening of the US Treasury yield curve, and the 12% drop in global stocks this year, point to concerns that the global economic recovery from the pandemic will lose momentum in the face of conflict risks and higher commodity prices.

“We are seeing extraordinary volatility in global equities, compounded by faltering market sentiment, and downside risks escalated by soaring commodity prices,” wrote Louise Dudley, portfolio manager at Federated Hermes for global equities. “We expect short-term volatility to continue with continued geopolitical uncertainty regarding Russian crude.”

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Senior officials from the United States and China are scheduled to meet on Monday to discuss Ukraine. Russian missiles have hit a military training facility in western Ukraine near Poland, raising new concerns about the conflict spilling over to Ukraine’s borders.

Meanwhile, China and Hong Kong are also facing a rise in COVID-19 cases. I set the authorities In isolation from the southern city of Shenzhen. The outbreak and disappointing bank lending data raised expectations for more political easing to support the Chinese economy.

Here are some key developments to watch this week:

  • China Medium Term Lending Facility Rate, Economic Activity Data, Tuesday
  • EIA report on crude oil inventories, Wednesday
  • FOMC Rate Decision & Press Conference by Federal Reserve Chair Jerome Powell on Wednesday
  • Bank of England interest rate decision, Thursday
  • Lecture by European Central Bank President Christine Lagarde, Executive Committee Member Isabelle Schnabel, Board Member Ignazio Visco and Chief Economist Philip Lane on Thursday
  • Bank of Japan interest rate decision, Friday
  • For more market news, follow our Markets Live blog.

Some of the main movements in the markets:

Procedures

  • S&P 500 futures rose 0.6% at 7:43 am in Tokyo. The S&P 500 fell 1.3% on Friday
  • Nasdaq 100 contracts rose 0.6%. The Nasdaq 100 fell 2.1% on Friday
  • And futures contracts for the Nikkei 225 index fell 0.9 percent.
  • Australia’s S&P/ASX 200 futures rose 0.3%.
  • Hang Seng futures were down 2.1%.

currency exchange rate

  • The Japanese yen was trading at 117.56 to the dollar
  • The offshore yuan reached 6.3645 to the dollar
  • Spot dollar index stabilized Bloomberg
  • The euro was at $1.0930, up 0.2%.
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Rewards

  • The 10-year Treasury yield was little changed on Friday, coming in at 1.99%.
  • The Australian 10-year bond yield settled at 2.40%.

Raw materials

  • West Texas Intermediate crude fell 2.3 percent to $106.80 a barrel.
  • Gold fell 0.8 percent to $1,973.22 an ounce