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20.06.2022 06:41 PM
US futures gain with European stocks

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US index futures staged a modest rebound on Monday along with stocks in Europe as investors weighed whether last week's selloff had gone far enough to price in concerns about rising rates and slowing growth.

S&P 500 contracts advanced about 0.7% after the worst week of the year. Nasdaq 100 futures rose around 0.5%. Treasury futures were mixed due to a US holiday.

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Banks and energy companies led the advance in the Stoxx Europe 600 index. Basic resources underperformed amid a slump in raw-material prices. Underscoring the uncertainty pervading markets, Swiss engineering group ABB Ltd. declined after postponing a listing of its electric-car charging business, citing volatile conditions.

European bonds were mostly lower after European Central Bank policymaker Martins Kazaks said the central bank was ready to combat unwarranted financial-market moves, but must also be prepared to look through turbulence as it exits negative interest rates.

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The French stock market is plunging after President Emmanuel Macron lost his absolute majority in parliament, putting his reform agenda in peril. UK bonds fell as the country faces up to surging inflation and labor strikes, as well as a rising risk of recession in a series of setbacks that have echoes of the 1970s.

Volatility measures remain elevated as investors look for an entry point into equity markets roiled by soaring price pressures and worries that aggressive monetary tightening will tip major economies into recession.

JPMorgan's strategists said pressure on stocks should ease in the second quarter as inflation moderates, but others, including Morgan Stanley, cautioned that more losses may be in store."Both prolonged inflation and/or a sharp increase in rates from central banks will have a deep impact on growth perspectives," Jean-Francois Paren, global head of market research at Credit Agricole CIB, wrote in a note. "If anything, current valuations are more the 'exit point' than the 'entry point'.MSCI Inc.'s index of Asian shares dropped for an eighth day, the longest stretch since February 2020. China managed to buck the wider trend, continuing a recent spell of outperformance in part on Beijing's vows of economic support.Key events this week:

  • RBA minutes, Governor Philip Lowe due to speak, Tuesday
  • Fed Chair Jerome Powell semi-annual Senate testimony, Wednesday
  • Bank of Japan April minutes, Wednesday
  • Powell US House testimony, Thursday
  • US initial jobless claims, Thursday
  • PMIs for Eurozone, France, Germany, UK, Australia, Thursday
  • ECB economic bulletin, Thursday
  • US University of Michigan consumer sentiment, Friday
  • RBA's Lowe speaks on panel, Friday
Andrey Shevchenko,
Analytical expert of InstaForex
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