Tech Helps Stocks Extend Global Rally; Yen Climbs: Markets Wrap

(Bloomberg) — Stocks extended a climb Monday, bolstered by the technology sector, as investors evaluated whether inflation is close to cresting and the chances of skirting a recession amid monetary tightening.

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An Asian share index jumped over 1%, helped by Chinese tech firms as well as gains in Japan. US futures inched lower in the wake of a more than 3% Friday surge on Wall Street that cemented the best week for global stocks in a month.

Treasuries were steady. Yields have retreated from June highs as growth worries take center stage, leaving the US 10-year rate at 3.13%. Whether that marks the end of the Treasury bear market is another live debate.

The yen strengthened against the dollar, while a greenback gauge dipped.

Oil traded around $107 a barrel, sapped again by concerns about demand. Traders are also monitoring a summit of the Group of Seven leaders, who plan to commit to indefinite support for Ukraine in its defense against Russia’s invasion. The G-7 in addition is weighing a price cap on Russian oil.

Investors are parsing incoming data to work out if the highest inflation in a generation is close to topping out. In time, that could give policy makers latitude to ease up on sharp interest-rate hikes. A more troubling scenario is of lasting price pressures and tighter policy even as the global economy falters.

“There’s a feeling that things aren’t as bad as we thought they were going to be,” Carol Pepper, founder of Pepper International, said on Bloomberg Radio. She added “there’s a hope that perhaps we’ve oversold, perhaps there’s not going to be a recession.”

Federal Reserve Bank of San Francisco President Mary Daly said Friday she favors another 75 basis-point rate increase in July. Meanwhile, Fed Bank of St. Louis President James Bullard said fears of a US recession are overblown.

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Elsewhere, Russia defaulted on its foreign-currency sovereign debt for the first time in a century, the culmination of ever-tougher Western sanctions that shut down payment routes.

The US, UK, Japan and Canada also plan to announce a ban on new gold imports from Russia during the G-7 summit. Prices for the precious metal rose.

In cryptocurrencies, Bitcoin and a range of other tokens weakened slightly but the largest virtual coin held above $21,000.

What to watch this week:

• China industrial profits, US durable goods, Monday

• San Francisco Fed President Mary Daly comments, Tuesday

• ECB President Christine Lagarde, Federal Reserve Chair Jerome Powell, BOE Governor Andrew Bailey and Cleveland Fed President Loretta Mester due to speak at ECB event, Wednesday

• US GDP, Wednesday

• St. Louis Fed President James Bullard speaks, Wednesday

• China PMI, Thursday

• US consumer income, PCE deflator, initial jobless claims, Thursday

• Eurozone CPI; US construction spending, ISM Manufacturing, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.2% as of 10:52 a.m. in Tokyo. The S&P 500 rose 3.1%

• Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 3.5%

• Japan’s Topix index rose 0.7%

• Australia’s S&P/ASX 200 Index added 1.6%

• South Korea’s Kospi index rose 1.5%

• Hong Kong’s Hang Seng Index rose 1.7%

• China’s Shanghai Composite Index rose 0.8%

• Euro Stoxx 50 futures increased 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro was at $1.0560, up 0.1%

• The Japanese yen was at 134.64 per dollar, up 0.4%

• The offshore yuan was at 6.6858 per dollar, down 0.1%

Bonds

Commodities

• West Texas Intermediate crude fell 0.1% to $107.47 a barrel

• Gold was at $1,834.48 an ounce, up 0.4%

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