Stock Slide Arrested for Now; Yields Hit New Lows

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(March 26): Asian stocks may see a muted open Tuesday after their biggest slide this year. U.S. Treasury yields extended a decline amid growing fears of a global economic slowdown.

Japanese equity-index futures were little changed in Chicago, as was the Australian stock benchmark in early trading. U.S. futures were flat after the S&P 500 Index closed little changed on Monday, when homebuilders surged thanks to reduced borrowing costs though technology shares sank as investors took little encouragement from Apple Inc.’s new services offerings. Ten-year Treasury yields fell below 2.4 percent for the first time since December 2017 as traders bet the next Federal Reserve move is to cut rates. The pound was flat as Britain’s Parliament works through yet more votes on Brexit proposals.

Traders on Monday pushed down the value of risk assets amid mounting concern over a global downturn and after stock valuations climbed near levels reached during the height of last year’s euphoria. The Fed may have to put rate hikes on hold or even ease monetary policy if economic forecasts for 2019 disappoint, Chicago Fed President Charles Evans said.

Elsewhere, European shares dropped even after data showed confidence among German companies improved.

Here are some key events coming up:

U.S.-China trade talks resume, with a cabinet-level American delegation due in China. U.K. Parliament is likely to stage several key votes on Brexit. China’s Boao Forum for Asia holds its annual conference this week. A top Chinese government leader will deliver a keynote speech, and officials including Central Bank Governor Yi Gang and Finance Minister Liu Kun are scheduled to speak. Fed Governor Randal Quarles will speak Friday to the Shadow Open Market Committee on “Strategic Approaches to the Fed’s Balance Sheet and Communications.”

These are the main moves in markets:

Stocks

Futures on the Nikkei 225 were flat in Chicago. Australia’s S&P/ASX 200 Index was little changed. Hong Kong’s Hang Seng Index futures rose 0.4 percent overnight. Futures on the S&P 500 Index were little changed after the underlying gauge slipped less than 0.1 percent Monday.

Currencies

The yen was little changed at 110.03 per dollar. The offshore yuan was steady at 6.7176 per dollar. The euro traded at $1.1316. The British pound was at $1.3207, roughly matching the average level for the past month.

Bonds

The yield on 10-year Treasuries dipped four basis points Monday, to 2.40 percent. Australian 10-year yields hit a fresh record low Tuesday, and are now at 1.77 percent.

Commodities

West Texas Intermediate crude steadied at $59.14 a barrel. Gold was flat at $1,322.26 an ounce. - Bloomberg