US Yields Extend Slide on Worries Over Economy: Markets Wrap

(Bloomberg) — Treasury yields headed for one of the longest streak of declines since 2020 and US equity-index futures were little changed as bets the world economy is set for a sharper slowdown outweighed concerns over elevated inflation and monetary tightening.

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The two-year US government-bond yield slid for a fifth day, while the 10-year rate witnessed a seventh-day drop. That was the longest sequence of declines since 2020, barring similar moves around the July 4 holidays in the past two years. Contracts on the S&P 500 and Nasdaq 100 indexes slipped less than 0.1% each, while a gauge of global stocks headed for a weekly loss, after a private US jobs report and purchasing managers’ indexes provided further evidence of weakening growth in the world’s largest economy.

Signs of a slowdown in US labor and manufacturing activity have pushed money markets to assign a lower probability of 44% that the Federal Reserve will raise interest rates by 25 basis points in May. That marks a contrast to the start of the week when they had seen a 70% chance for the hike. Swaps traders now expect the central bank to start cutting rates as early as July.

The two-year Treasury yield shed 6 basis points to 3.72%, while the 10-year rate fell 3 basis points to 3.28%. Government bondsalso rose in Australia, New Zealand, the UK and Germany. The dollar fluctuated between gains and losses. Commodities fell and crude oil pared its third weekly gain. The moves came before Easter holidays that will see many markets around the world closed.

European stocks rose, with the benchmark Stoxx 600 ending a three-day slide, as traders assessed trends in corporate earnings. Shell jumped as preliminary figures showed the company has maintained the performance at its gas-trading business despite a price slump. Temenos AG advanced after Bloomberg reported it asked for fresh expressions of interest from potential suitors.

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Indian shares provided a relative bright spot in Asian trading, with the Nifty 50 advancing after the central bank paused its rate hikes. The rupee trimmed gains on the central bank’s decision, which contrasted with forecasts of a 25 bis point hike.

Key events this week:

• US initial jobless claims, Thursday

• St. Louis Fed President James Bullard speaks, Thursday

• US unemployment, nonfarm payrolls, Friday

• Good Friday. US stock markets closed, bond markets close for part of the day

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.4% as of 8:37 a.m. London time

• S&P 500 futures were unchanged

• Nasdaq 100 futures were little changed

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index fell 0.7%

• The MSCI Emerging Markets Index fell 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0913

• The Japanese yen was little changed at 131.29 per dollar

• The offshore yuan rose 0.1% to 6.8785 per dollar

• The British pound rose 0.2% to $1.2482

Cryptocurrencies

• Bitcoin fell 0.5% to $28,017.31

• Ether fell 1.1% to $1,885.68

Bonds

• The yield on 10-year Treasuries declined three basis points to 3.28%

• Germany’s 10-year yield was little changed at 2.17%

• Britain’s 10-year yield declined two basis points to 3.41%

Commodities

• Brent crude fell 0.4% to $84.67 a barrel

• Spot gold fell 0.2% to $2,017.16 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson.

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