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U.S. Opening Bell: Futures Rise; Europe Stocks, Oil Waver; Bond Selloff Resumes

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Moscow’s stock exchange partially reopens on light volume
Treasuries revisit Tuesday levels
Oil volatility continues

Key Events

Futures contracts on the Dow Jones, S&P 500, NASDAQ 100 and Russell 2000 rebounded on Thursday in muted trading. They’re currently tracking European shares higher after this morning’s Asian selloff.

Investors resumed dumping Treasuries after briefly reversing back into the sovereign bonds during the recent stock rout. Still, fears of rising inflation and more aggressive Fed monetary policy outlook continue to roil markets.

The dollar and gold both gained, notwithstanding they usually trade in opposition to each other. Bitcoin rose as well.

Global Financial Affairs

After having been one of only two sectors in the green during Wednesday’s Wall Street session, Utilities boosted the STOXX Europe 600 0.2% higher at the open, offsetting a selloff in tech shares.

STOXX 600 Daily

The pan-European benchmark opened higher on Wednesday but closed lower than Tuesday’s close, completing a Bearish Engulfing pattern. The trading demonstrates a bullish effort that was thwarted by bears. The location of the two candlesticks within the bearish pattern is telling—at the 50 DMA (after it crossed below the 200 DMA, triggering a Death Cross) and around the neckline of an H&S top.

The Moscow stock exchange surged after partially reopening this morning. The Moskovskaya Birzha (MCX:MOEX) had been closed for almost an entire month.

MOEX Daily

The previous trading session on the exchange took place on Feb. 25. Nevertheless, even amid the bounce for the local currency, the Russian ruble, trading volume was the lowest for the year.

Earlier Thursday, most Asian benchmarks closed lower after a volatile session as traders tried to make sense out of a plethora of market forces, including the latest developments in Ukraine after Russia’s invasion, more hawkish Fed comments, and a possible next wave of COVID.

Japan’s Nikkei 225, however, outperformed, rising 0.25% to a nine-week high, as retreating oil prices eased pressure on the country’s energy import-dependent economy. The regional benchmark has now moved higher for seven consecutive sessions.

The only other primary regional index to end on a positive note was Australia’s ASX 200, which gained 0.12%, benefiting from rising miners and energy stocks. The Australian benchmark’s sixth advance amid seven sessions has reached the highest level since Jan. 18.

On Wednesday, during the New York session, U.S. stocks fell as investors rerouted capital to Treasuries after the bond dip. Sovereigns suffered unprecedented losses triggered by ongoing monetary tightening.

All four major indices closed in the red about evenly, with the Russell 2000 losing the most, declining 1.5%. The S&P 500 Index followed, dipping 1.23%. Financials and Health Care shares underperformed; both sectors lost about 1.8% of value.

A rebound in oil prices boosted Energy equities. For the first time in days, the Energy sector outperformed, gaining 1.72%. The only other sector to close in positive territory was Utilities, which added 0.14% in value.

After taking advantage of yesterday’s Treasury dip, traders are once again selling off bonds. Investors get rid of stale Treasury payouts, including for the 10-year note, in favor of higher yields that match rising US interest rates.

UST 10Y Weekly

The yield advance extended, with both price and momentum-based indicators providing positive signals, after the price crossed over and found support by the 200 WMA, upon completing a big H&S bottom.

The dollar rose for a fifth day.

Dollar Daily

The greenback is headed toward the top of a falling channel and is expected to break to the topside after completing an H&S bottom.

Gold advanced for a second day.

Gold Daily

The precious metal could be forming the right shoulder of a small H&S top after realizing the preceding symmetrical triangle’s target.

Bitcoin also climbed.

BTC/USD Daily

The cryptocurrency is pushing toward the top of a symmetrical triangle amid a third day of falling volume, following an H&S top.

Oil volatility continued.

Oil Daily

WTI fluctuated near the highs of the previous two sessions as supply worries lingered. If the price should fall below $93.63, that would establish a downtrend. For now though, the energy commodity remains in an uptrend.

Up Ahead

US President Joe Biden is meeting with NATO allies for an emergency summit in Brussels on Thursday
Weekly Initial Jobless Claims and US Durable Goods Orders print on Thursday

Market Moves

Stocks

The Stoxx Europe 600 rose 0.2%
Futures on the S&P 500 rose 0.6%
Futures on the NASDAQ 100 rose 0.8%
Futures on the Dow Jones Industrial Average rose 0.5%
The MSCI Asia Pacific Index rose 1.2%
The MSCI Emerging Markets Index rose 0.8%

Currencies

The Dollar Index rose 0.2%
The euro fell 0.2% to $1.0980
The Japanese yen fell 0.4% to 121.59 per dollar
The offshore yuan was little changed at 6.3839 per dollar
The British pound fell 0.3% to $1.3169

Bonds

The yield on 10-year Treasuries advanced five basis points to 2.34%
Germany’s 10-year yield increased two basis points to 0.49%
Britain’s 10-year yield was little changed at 1.63%

Commodities

WTI crude fell 0.36% to $114.48 a barrel
Brent crude was little changed
Spot gold fell 0.1% to $1,941.46 an ounce

Ruble Closes at Highest Since February

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