Headlines:
US futures look to rebound after tech rout but the real test is still ahead
European stock market open: French unrest weighs on stocks to start the new week
Gold eyes another run at $4,200 but the bond market still holds the key
Gold remains supported as real yields fall amid growth concerns. What to watch next?
Bitcoin rebounds from a key support as risk sentiment improves on falling oil prices, but will it last?
Markets:
AUD leads, EUR lags on the day
WTI crude oil down 0.4% to $98.64
Gold up 0.2% to $4,172
European stocks down; S&P 500 futures +0.5%
Bitcoin up 1.5% to $82,124
It’s a rather contrasting session to start the new week in Europe today.
The mood music for European stocks is rather dour and that is quite different from the tune that US futures are singing to at the moment. Major indices in Europe are down over 1%, as riots in France add another layer of uncertainty to an already fragile political and fiscal backdrop. That in turn is weighing on regional stocks as well as the euro to start the week.
EUR/USD is down 0.2% to 1.1220 with the low earlier even briefly dipping below the 1.1200 mark. That comes despite the dollar holding more mixed across the board with USD/JPY up slightly by 0.1% to 158.18 but AUD/USD is also up 0.6% to 0.6985 on the day.
Looking to US futures, tech shares are looking to bounce back after the heavy selloff last week. Nasdaq futures are leading gains, up by 1.2% on the day. A modest easing in Treasury yields is providing some breathing room for tech stocks, although I’d argue that the bond market still holds the key to whether this recovery has legs.
Meanwhile, gold is also one to be benefiting from the softer yields backdrop as the precious metal climbs up by 0.2% to $4,172. A test of $4,200 may be beckoning once again as the US bond market selloff continues to take a breather for now.
As we get things going in the new week, it seems that Wall Street is happy to look past Europe’s political troubles and keep the focus on the relief from lower Treasury yields.
Having said that, the question remains whether that optimism can hold if Treasury yields start climbing again or if Europe’s political stress begins spilling over into broader market sentiment.
This article was written by Justin Low at investinglive.com.
