(Bloomberg) – U.S. stocks and equity futures fell on Monday, hit by a slump in Hong Kong real estate developers and nervousness ahead of a Federal Reserve meeting that should point to a move towards a degressive stimulus. The dollar has gone up.
Hong Kong stocks fell, with a report suggesting Beijing may extend its crackdown on private industries to include real estate companies in the city. Investors are also watching the risk of contagion from the debt crisis at developer giant China Evergrande Group. Ping An Insurance sank amid concerns over its real estate exposure. The offshore yuan has fallen.
Australian stocks and the national currency weakened as iron ore extended its losses below $ 100 per metric tonne. US futures were in the red after the S&P 500 slipped the most in a month, a test for the buying psychology of the downside as the gauge sits at its 50-day moving average.
Ten-year Treasury yields rose ahead of the Fed’s meeting this week, where policymakers are expected to start laying the groundwork for a stimulus package. Japan and China are among the main Asian markets closed for the holidays. There are no cash treasury bills in Asia.
In addition to Evergrande and the prospect of a reduction in Fed stimulus measures, financial markets also face risks related to uncertainty over the outlook for President Joe Biden’s $ 4 trillion economic program as well as the need to raise or suspend the US debt ceiling. Investors were already worried about the slowing global recovery from the pandemic and inflation fueled by commodity prices.
“Inflation is rising in the system, wages are rising, supply chains are driving prices up steadily, and with so many central banks having to make rate decisions, we think it’s a little nervous,” said Tony, president and chief investment officer of Knights of Columbus Asset Advisors. Minopoli, said on Bloomberg Television.
Treasury Secretary Janet Yellen said the US government would be strapped for cash to pay its bills in October without debt ceiling action, warning of “economic catastrophe” unless lawmakers take action required. Meanwhile, the central banks of Japan and the UK are also making rate decisions this week.
In cryptocurrencies, Bitcoin slipped and was trading at around $ 46,000. Other tokens such as Ether have also retreated.
Here are the key events to watch this week:
Canadian Federal Election, Monday Bank of Japan rate decision, Wednesday Federal Reserve rate decision, Wednesday Bank of England rate decision, Thursday Fed Chairman Jerome Powell, Fed Governor Michelle Bowman and Deputy President Richard Clarida discuss pandemic recovery on Friday
For more market analysis, read our MLIV blog.
Some of the main movements in the markets:
S&P 500 futures fell 0.7% at 11:43 a.m. in Tokyo. The S&P 500 fell 0.9%. Futures contracts on the Nasdaq 100 lost 0.5%. The Nasdaq 100 fell 1.2% Australian S & P / ASX 200 index fell 1.8% Hong Kong’s Hang Seng index slipped 3.5%
The Japanese yen was at 109.92 per dollar.
On Friday, the yield on 10-year Treasuries rose two basis points to 1.36%.
West Texas Intermediate crude was at $ 71.33 per barrel, down 0.9% Gold was at $ 1,747.24 per ounce, down 0.4%
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