Bonds, Stocks Extend New Year Drop Before US Data: Markets Wrap

(Bloomberg) -- US bonds and stock futures extended their drop as traders braced for a swathe of data that could show whether bets on interest-rate cuts this year are justified.

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Ten-year Treasury yields rose to 3.97% and S&P 500 futures slid 0.4%. The dollar strengthened for a fourth day, the longest run since November. Nvidia Corp. slid in US premarket trading as investors continued their retreat from tech stocks.

US markets are set to extend their declines from Tuesday, which registered as the biggest global slump since 1999 for the first full day of trading in a year. Minutes from the Federal Reserve’s last meeting and economic data on manufacturing and job openings are due later today.

“It’s a very heavy data week — we have minutes, we have payroll, we have ISM,” said Adarsh Sinha, Bank of America Corp’s co-head of Asia FX & rates strategy on Bloomberg Television. “It’s natural investors are reducing some risks in some of the heavily crowded trades toward year-end.”

In the two-day pullback this year, long-end UK bonds have been among the hardest hit. Yields on 30-year UK government notes have risen 14 basis points, more than their US and German equivalents.

Investors are ditching long-end gilts to free up cash before the UK sells new debt that may have a higher coupon.

In Asia, the MSCI regional benchmark sank 1.2% in the steepest retreat since November as investors sold technology stocks.

Key events this week:

US FOMC minutes, ISM Manufacturing, job openings, light vehicle sales, Wednesday
Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Wednesday
China Caixin services PMI, Thursday
Eurozone S&P Global Eurozone Services PMI, Thursday
US initial jobless claims, ADP employment, Thursday
Eurozone CPI, PPI, Friday
US nonfarm payrolls/unemployment, factory orders, ISM services index, Friday
Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Friday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.8% as of 11:52 a.m. London time
S&P 500 futures fell 0.3%
Nasdaq 100 futures fell 0.4%
Futures on the Dow Jones Industrial Average fell 0.3%
The MSCI Asia Pacific Index fell 1.2%
The MSCI Emerging Markets Index fell 1.3%

Currencies

The Bloomberg Dollar Spot Index rose 0.3%
The euro fell 0.2% to $1.0920
The Japanese yen fell 0.6% to 142.88 per dollar
The offshore yuan fell 0.1% to 7.1574 per dollar
The British pound was little changed at $1.2627

Cryptocurrencies

Bitcoin fell 2.1% to $44,194.01
Ether fell 1.6% to $2,328.43

Bonds

The yield on 10-year Treasuries advanced four basis points to 3.97%
Germany’s 10-year yield was little changed at 2.07%
Britain’s 10-year yield advanced one basis point to 3.65%

Commodities

Brent crude was little changed
Spot gold fell 0.5% to $2,049.40 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Joanna Ossinger, Tassia Sipahutar and Pearl Liu.