- In a cautious start to trading Monday, Asian markets were divided, while US and European share futures rose modestly as investors assessed the likelihood of more rate hikes and an economic downturn. The value of the dollar increased.
- Equities surged in Japan and Australia, while shares rose in Shanghai after the PBoC maintained a key lending rate and delivered the smallest net injection of liquidity since November.
- Futures for the S&P 500 increased by 0.2%, those for the Euro Stoxx 50 increased by nearly the same amount, while Nasdaq 100 contracts were little changed. The S&P 500 gained 0.8% last week, while the Nasdaq 100 gained 0.1%, as policy-sensitive technology firms such as Microsoft and Apple pulled on the tech index. Swaps traders increased their bets on a June rate hike, and pricing suggests a quarter-point boost has better than three-in-four odds for May.
- The dollar rose marginally against its major peers. Treasury rates were little moved Monday, with the rate-sensitive 2-yr yield hanging around 4.1%. This week, it was pushed higher by a measure of March retail sales that showed core readings fell less than expected and remarks from Fed officials. Government bond yields in Australia and New Zealand rose in early trading.
- Looking further ahead this week, investors are awaiting the release of the Fed’s Beige Book and commentary from officials including Fed's Williams, Fed's Bostic, Fed's Mester and Fed's Cook. Markets were rattled last week after Fed's Waller said he favored more policy tightening the central bank’s battle with inflation.
