US equity futures rise while treasuries decline: markets wrap

US equity futures eked out small gains on Friday after solid economic data and President Joe Biden’s federal spending plans spurred a Wall Street rally in cyclical shares. Treasury yields climbed and the dollar strengthened.

The Stoxx Europe 600 index advanced, led by raw-material producers and banks. MSCI Inc.’s Asia-Pacific equity gauge was set for the highest close in a month, with shares in Japan outperforming. Earlier, industrial and financial equities fueled a modest overall increase in the S&P 500, which is on track for a fourth month of gains, with small-caps outperforming. The tech-heavy Nasdaq 100 slipped.

US data included a drop in jobless claims to a fresh pandemic low. Biden is reportedly set to unveil a budget that would take federal spending to $6 trillion in the coming fiscal year. Investors will watch data on personal spending later Thursday for further clues on the inflation outlook.

The 10-year US Treasury yield reached 1.62% amid growth optimism and concerns of more debt supply to fund spending. The yen fell as Japan recommended extending a state of emergency that includes Tokyo to curb infections. China signaled the yuan’s recent appreciation is too rapid, with a weaker-than-expected reference rate.

Global stocks are set to climb for a fourth month, supported by the economic rebound from Covid-19. Comments from Federal Reserve officials have helped temper fears that inflation could spark a faster-than-expected reduction in stimulus. Treasury Secretary Janet Yellen said she sees the burst in prices as temporary, though likely to last through the end of 2021.

“Between now and year end, we see a little more room for stocks to move up from where they are today and the highs they already achieved earlier this year,” Lori Calvasina, head of US equity strategy at RBC Capital Markets LLC, wrote in a note. “But we don’t think that the path to get there will be smooth and think a short-term pullback before the year is up remains likely.”

Elsewhere, oil was steady around a two-year peak but gold retreated. Bitcoin slipped further below the $40 000 level. Copper and iron ore gained, even after several Chinese commodity firms pared back their bullish futures bets at the request of the government in a further sign of Beijing’s concern over this year’s surge in raw materials.

These are some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 8:09 a.m. London time
• Futures on the S&P 500 rose 0.2%
• Futures on the Nasdaq 100 were little changed
• The MSCI Asia Pacific Index rose 0.8%
• The MSCI Emerging Markets Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro was little changed at $1.2184
• The Japanese yen fell 0.1% to 109.94 per dollar
• The offshore yuan was little changed at 6.3687 per dollar
• The British pound fell 0.1% to $1.4187

Bonds

• The yield on 10-year Treasuries advanced one basis point to 1.62%
• Germany’s 10-year yield advanced one basis point to -0.16%
• Britain’s 10-year yield advanced one basis point to 0.83%

Commodities

• Brent crude fell 0.3% to $69 a barrel
• Spot gold fell 0.4% to $1 890 an ounce