European stock futures were poised to follow their Asian counterparts higher as global investors shift their focus away from US assets amid increasing uncertainty surrounding US policies under former President Donald Trump. Contracts on the Euro Stoxx 50 rose by 0.5%, while US equity futures saw a retreat. The MSCI Asia Pacific Index gained for the third consecutive session, with Hong Kong’s stock market rallying by more than 2% and Japan’s indexes up by over 1%.
Following a correction in US stocks earlier this month, global investors are seeking alternatives, with Chinese tech stocks in high demand. Europe has also seen benefits, particularly as Germany looks to implement a more expansive fiscal policy. German lawmakers are set to vote Tuesday on a bill that would authorize substantial debt-financed spending on defense and infrastructure projects, potentially unlocking hundreds of billions of euros.
Gold continued its upward trajectory, reaching a new all-time high of over $3,017 per ounce. Meanwhile, the yield on 10-year US Treasury bonds remained largely unchanged as the Federal Reserve prepared to begin a two-day policy meeting. The Bloomberg Dollar Index edged up by 0.1%.
In Asia, China’s stock market rally may be further fueled by a series of tech earnings reports expected this week, with companies like Xiaomi Corp. and Tencent Holdings Ltd. set to announce results. Additionally, President Trump revealed that Chinese President Xi Jinping would soon visit Washington, which could add further momentum to Chinese stocks.
In Japan, the stock market was lifted by gains in trading companies following an announcement that Warren Buffett’s Berkshire Hathaway had increased its stake in several Japanese firms. The Bank of Japan is widely expected to maintain its policy rate at 0.5% in its Wednesday decision. The Japanese yen fell against the dollar for the third consecutive day, approaching the 150 mark.
“Market-friendly rhetoric from Beijing provides a more favorable backdrop for Asian stocks today, and the news of increased investment from the likes of Warren Buffett will certainly help,” said Homin Lee, senior macro strategist at Lombard Odier. “While the nervous wait for Trump’s additional trade restrictions and export controls continues, strong inflows into Hong Kong from mainland buyers will help stabilize sentiment.”
In Indonesia, stocks experienced their most significant drop in over a decade, triggering a 30-minute trading suspension. The decline came amid growing concerns over a weakening economy and declining consumer demand.
Meanwhile, in the US, retail sales in February grew less than expected, with revisions showing a decrease in the previous month’s data. However, the so-called “control-group” retail sales—used to calculate goods spending for GDP—rose by 1%, reversing the previous month’s decline.
“While recession fears may seem exaggerated at the moment, the US economy is still on a slowing trajectory, keeping valuations under scrutiny,” said Jun Rong Yeap, a market strategist at IG Asia.
This week, policymakers are expected to take a cautious approach in their first assessment of the impact of President Trump’s trade policies on the economy. The Federal Reserve is likely to keep rates steady during its meeting Wednesday, but attention will be focused on economic projections and Chair Jerome Powell’s press conference for any indications of future monetary policy direction.
In commodities, oil prices rose for the third consecutive day as escalating tensions in the Middle East outweighed concerns about a potential global supply glut.
Key Economic Events This Week:
- US Housing Starts, Import Price Index, Industrial Production (Tuesday)
- Bank of Japan Rate Decision (Wednesday)
- Federal Reserve Rate Decision (Wednesday)
- China Loan Prime Rates (Thursday)
- Bank of England Rate Decision (Thursday)
- US Philadelphia Fed Factory Index, Jobless Claims, Existing Home Sales (Thursday)
- Eurozone Consumer Confidence (Friday)
- Federal Reserve’s John Williams Speaks (Friday)
Market Moves:
Stocks:
- S&P 500 futures fell by 0.3%
- Nasdaq 100 futures fell by 0.4%
- Dow Jones futures dropped by 0.2%
- MSCI Asia Pacific Index rose by 0.9%
- MSCI Emerging Markets Index increased by 1%
Currencies:
- Bloomberg Dollar Spot Index rose by 0.2%
- Euro fell 0.1% to $1.0906
- Japanese yen dropped 0.4% to 149.82 per dollar
- Offshore yuan declined 0.1% to 7.2361 per dollar
- British pound decreased 0.2% to $1.2971
Cryptocurrencies:
- Bitcoin fell 1.4% to $82,744.17
- Ether dropped 1.9% to $1,898.23
Bonds:
- 10-year US Treasury yield declined by one basis point to 4.29%
- Germany’s 10-year yield dropped by six basis points to 2.82%
- Britain’s 10-year yield fell by three basis points to 4.64%
Commodities:
- Brent Crude rose by 0.6% to $71.48 per barrel
- Spot Gold increased by 0.4% to $3,012.44 per ounce
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