(Bloomberg) — The dollar rose in early trading Monday, adding to a third week of gains, as aggressive comments from Federal Reserve officials and geopolitical tensions bolstered the greenback’s appeal. Asian stocks looked set for a mixed open.
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Australia’s benchmark index fluctuated, while US stock futures fell after the S&P 500 index fell on Friday and fell back for a second week. Japanese share contracts pointed to small gains, while those in Hong Kong fell.
A report from Goldman Sachs Group Inc. hinting at a rebound in Chinese stocks added a counterbalance to the flow of news curbing appetite for stocks. Investors in China will also be watching for any possible reduction in the nation’s prime lending rates on Monday.
The dollar made small gains against most of its Group of 10 peers after a weekend in which tensions between the United States and China did not ease. Beijing’s top diplomat called the US response to the balloon he shot down “hysterical,” while his counterpart, Antony Blinken, said his entry into their nation’s airspace was “irresponsible.” Meanwhile, North Korea tested an intercontinental ballistic missile.
Beyond this, investors are focused on the changing interest rate outlook, with traders fully pricing in quarter-point interest rate hikes at the next two Fed meetings after officials said on Thursday that larger increases are not ruled out.
Richmond Federal Reserve Bank President Thomas Barkin said Friday he favored a quarter percentage point interest rate hike in February to give the central bank “flexibility” as it seeks to control inflation. Fed Governor Michelle Bowman said rates need to keep rising as inflation remains “too high.”
In commodities, oil rose fractionally after capping its biggest string of daily losses of the year last week. Rising US oil inventories and the prospect of further tightening by the Fed last week dwarfed the momentum of signs that China’s energy demand is improving.
Key events this week:
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Earnings for the week are scheduled to include: Alibaba, Anglo American, AXA, BAE Systems, Baidu, BASF, BHP, Danone, Deutsche Telekom, EBay, Holcim, Home Depot, Hong Kong Exchanges & Clearing, HSBC, Iberdrola, Lloyds Banking Group, Moderna, Munich Re, Newmont, Nvidia, Rio Tinto, Walmart, Warner Bros. Discovery
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China lending prime rates, Monday
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US financial markets closed for Presidents Day holiday, Monday
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PMI for Japan, Eurozone, UK, US, Tuesday
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US existing home sales, Tuesday
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US MBA Mortgage Applications, Wednesday
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The minutes of the Federal Reserve from January 31 to February 31. 1 policy meeting, Wednesday
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Eurozone CPI, Thursday
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US GDP, initial jobless claims, Thursday
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Atlanta Fed President Raphael Bostic speaks Thursday
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G20 finance ministers and central bank governors meet in India from Thursday to Friday
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Japan CPI, Friday
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BOJ-nominated Governor Kazuo Ueda appears before Japan’s lower house on Friday
Some of the main movements in the markets:
Stocks
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S&P 500 futures were down 0.2% at 8:19 a.m. Tokyo time. The S&P 500 closed down 0.3% on Friday
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Nasdaq 100 futures fell 0.3%. The Nasdaq 100 closed down 0.7% on Friday
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Nikkei 225 futures rose 0.2%
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Australia’s S&P/ASX 200 Index was little changed
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Hang Seng Index futures fell 0.6%
coins
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The euro fell 0.1% to $1.0683
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The Japanese yen fell 0.1% to 134.30 per dollar
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The offshore yuan was little changed at 6.8789 to the dollar.
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The Australian dollar fell 0.2% to $0.6866
CRYPTOCURRENCIES
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Bitcoin fell 0.6% to $24,399.31
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Ether fell 0.2% to $1,683.52
Captivity
raw Materials
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West Texas Intermediate crude rose 0.1% to $76.42 a barrel
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Gold rose 0.3% to $1,842.36 an ounce on Friday.
This story was produced with the assistance of Bloomberg Automation.
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