U.S. Futures Gain, Bond Rally Pauses as Fed Eyed

U.S. equity futures and stocks posted modest gains Monday as investors prepared for a key Federal Reserve meeting later in the week. The rally in Treasuries appeared to lose steam. S&P 500 futures signaled the gauge was poised to add to Friday’s fresh record. European equities opened higher, led by shares in energy firms. The benchmark 10-year yield inched up to around 1.46% after hitting three-month lows on Thursday amid the biggest weekly slide since December.

With anxiety about the Fed’s plans to scale back monthly stimulus injections ebbing, bulls are reasserting their dominance. Investors anticipate the central bank will reaffirm the pace of bond purchases this week, even if it delivers projections for interest-rate liftoff in 2023, according to economists surveyed by Bloomberg. The decision is due Wednesday.

Oil extended a run of three weekly gains on optimism that economic reopenings will boost summer demand in the U.S. and Europe. Hedge funds boosted net-bullish positions to a nearly three-year high, according to the latest Commodity Futures Trading Commission data. The dollar was steady in the wake of a Group-of-Seven leadership meeting that emphasized unity. Meanwhile, Bitcoin jumped over the weekend after Elon Musk said Tesla would resume transactions with the cryptocurrency when mining it is done with more clean energy.

Stocks

Futures on the S&P 500 Index increased 0.1% as of 9:02 a.m. London time.The Stoxx Europe 600 Index rose 0.3%.The MSCI Asia Pacific Index was little changed.The MSCI Emerging Market Index declined 0.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro rose 0.1% to $1.2116.The British pound declined 0.1% to $1.4099.The onshore yuan weakened 0.1% to 6.399 per dollar.The Japanese yen was little changed at 109.69 per dollar.

Bonds

The yield on 10-year Treasuries jumped one basis point to 1.46%.The yield on two-year Treasuries climbed less than one basis point to 0.15%.Germany’s 10-year yield gained less than one basis point to -0.27%.Japan’s 10-year yield gained one basis point to 0.041%.Britain’s 10-year yield increased less than one basis point to 0.711%.

Commodities

West Texas Intermediate crude climbed 0.8% to $71.45 a barrel.Brent crude increased 0.9% to $73.34 a barrel.Gold weakened 1% to $1,858.74 an ounce.

U.S. Futures Gain, Bond Rally Pauses as Fed Eyed: Markets Wrap, Bloomberg, Jun 14