(Bloomberg) — European and U.S. stock futures fell on weakness in Asian markets, citing Meta Platforms Inc.’s disappointing outlook. underscoring the risk of volatility in a high-stakes winning week.
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The Euro Stoxx 50 contract fell 0.2%, while S&P 500 futures fell 0.8%. Equity benchmarks fell more than 1% in South Korea and Japan. Facebook parent Meta slumped 15% in U.S. after-hours trading as the company forecast second-quarter revenue below analyst expectations and raised spending estimates for the year.
In addition to earnings data, traders will keep a close eye on U.S. economic growth data and the Federal Reserve’s favorite inflation gauge, due out this week, to bolster their policy expectations. Markets have been scaling back the number of interest rate cuts expected by the Fed for weeks. Economists polled by Bloomberg predict that GDP is likely to have cooled to around 2.5% in the first quarter, with the data possibly still pointing to persistent inflationary pressures.
The yen extended losses after weakening above 155 per dollar on Wednesday for the first time in more than three decades, raising chances of intervention ahead of Friday’s Bank of Japan policy decision.
“Meta’s less-than-optimistic outlook sent markets scrambling for cover after hours, which will also threaten to spread caution to Asian markets already hampered by a ‘higher for longer’ Federal Reserve and Chinese jitters,” says Vishnu Varathan, head of the US central bank. Economist for Asia ex-Japan at Mizuho Bank in Singapore.
The yen depreciated to a weak point of 155.74 per dollar on Thursday, a new 34-year low against the dollar. The BOJ is expected to leave its interest rate settings unchanged on Friday, while the currency’s fall makes it more likely the bank will soften its stance on keeping policy loose.
“Ueda’s press conference is expected to take an aggressive tone, and even if the yen’s depreciation does not accelerate, the government is likely to intervene at the same time and allow the yen to rise more strongly by about 5 yen,” said Eiji Dohke, a spokesman for the US Department of State. strategist at SBI Securities. The first intervention would likely consist of trillions of yen, followed by smaller long-term purchases, he said.
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Asian government bonds were little changed after yields rose in the previous session. Investors on Wednesday absorbed a $70 billion sale of five-year Treasury notes at slightly higher-than-expected rates, following even stronger demand for Tuesday’s auction of two-year Treasury notes.
In other Asian markets, Hong Kong stocks outperformed due to increased buying by Chinese investors. Mainland traders have bought a net $20 billion worth of Hong Kong stocks since March, putting the market on track for the biggest two-month inflow since 2021, BNP strategists including Jason Lui said in a note.
Meanwhile, Secretary of State Antony Blinken said the world’s largest economies must “lay out our differences” as he kicked off two days of talks in China, with the threat of US sanctions on Beijing over its support for Russia’s war in Ukraine looming during his visit. .
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In the business world, shares of South Korea’s SK Hynix Inc. fell even after the company said it expects a full recovery in the memory market, as AI demand pushed the chipmaker to record its fastest pace of revenue growth since at least 2010 .
The stock “sold off on the news after Wednesday’s big gain – and Meta’s 15% decline is also hurting investor sentiment,” said Marcello Seongsoo Ahn, portfolio manager at Quad Investment Management Co. in Seoul.
BHP Group Ltd. has made a takeover bid for Anglo American Plc, a move that could potentially cause the biggest shake-up in the global mining industry in more than a decade.
Elsewhere, gold suffered a three-day decline. Oil fell modestly, with a risky tone in broader markets offsetting a decline in US inventories.
Main events this week:
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US GDP, wholesale inventories, initial unemployment claims, Thursday
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Microsoft, Alphabet, Airbus earnings, Thursday
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Japan interest rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
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US personal income and spending, PCE deflator, University of Michigan consumer confidence, Friday
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Exxon Mobil, Chevron earnings, Friday
Some of the major moves in the markets:
Shares
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S&P 500 futures fell 0.7% as of 6:33 a.m. London time
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Nikkei 225 futures (OSE) fell 2.1%
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S&P/ASX 200 futures fell 0.8%
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Japan’s Topix fell 1.7%
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Hong Kong’s Hang Seng rose 0.4%
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The Shanghai Composite rose 0.2%
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Euro Stoxx 50 futures fell 0.2%
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Nasdaq 100 futures fell 1.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0709
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The Japanese yen fell 0.2% to 155.73 per dollar
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The offshore yuan was little changed at 7.2687 per dollar
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The Australian dollar rose 0.2% to $0.6509
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The British pound was little changed at $1.2470
Cryptocurrencies
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Bitcoin rose 0.2% to $64,184.01
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Ether rose 0.8% to $3,155.96
Bonds
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The yield on 10-year government bonds was little changed at 4.65%
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The Japanese ten-year yield remained unchanged at 0.895%
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The Australian ten-year yield rose by 14 basis points to 4.41%
Raw materials
This story was produced with the help of Bloomberg Automation.
–With help from Stephen Kirkland, Youkyung Lee, Masaki Kondo, and Tania Chen.
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