Elsewhere in the macro world, U.S. Treasuries and the dollar continue to chomp at the bit on the unfolding stubborn Fed view, strong incoming economic numbers and the contrasting picture in Europe that means interest rates there look set to fall first.
Two-year U.S. Treasury yields probed above 5% again on Monday, with an auction of two-year paper due Tuesday.
The dollar continue to push higher to within a fraction of last week’s highs against Japan’s yen just under 155 per dollar, with the Bank of Japan meeting later this week.
But with the European Central Bank crystal clear about plans to cut its key policy rates as soon as June, the dollar remains pumped up against the euro too.
According to the latest CFTC data, speculative long positions in dollar built further in the week ending April 16, hitting $28.51 billion – the biggest position since June 2019.
The big mover on Monday was sterling, which skidded to 5-month lows after a surprisingly dovish speech on Friday from Bank of England deputy governor David Ramsden flagged how the BoE expected inflation to fall to 2% this quarter and stay there for the next couple of years.
With U.S. stock futures higher, most other world bourses were firmer too.
Hong Kong stocks climbed more than 1.5% even as mainland shares slipped, as investors found comfort in China securities regulator’s decision on Friday to promote the city’s status as a global financial center.
China will facilitate Hong Kong listings by leading Chinese companies and expand the Stock Connect cross-border investment scheme, the China Securities Regulatory Commission said.
China left benchmark lending rates unchanged at a monthly fixing on Monday, in line with market expectations.
European bank earnings will be in the stock market spotlight there this week as BNP Paribas, Deutsche Bank, Barclays and Lloyds all report.
Among the top stock movers on Monday, Galp Energia surged 17% after the Portuguese firm said that the Mopane field off Namibia could have at least 10 billion barrels of oil.
