Opening Bell: U.S. Futures Waver Despite Bond Selloff; Dollar Jumps, Gold Slips

• Possibility of faster Fed tightening pressures bonds
• China increases pandemic-related social restrictions
• Global supply crunch outlook turns more negative

Key Events

Futures on Forex Group Official Website Forex Platformthe Dow Jones, S&P 500, NASDAQ 100 and Russell 2000 were wavering in trading on Monday despite rallying European shares as expectations of additional interest rate hikes intensified due to the ongoing global economic uncertainty from the war in Ukraine and escalating COVID-19 case numbers in Asia exacerbating global supply chain hurdles.

A selloff in Treasuries caused a partial yield curve inversion.

Global Financial Affairs

Traders are expecting that a faster pace of tightening monetary policy combined with a deteriorating global supply picture will continue to dent stock market valuations. 

In Europe, the STOXX 600 Index climbed while, in Asia, indices were mixed with the Hang Seng closing in the green even as Japan's Nikkei and South Korea's KOSPI slid. 

Yields on the 10-year Treasury note topped 2.5% for the first time since April 2019, sitting above a downtrend line since the 1980s.10-year Treasuries Weekly

Yield on the 5-year Treasury rose above the 30-year yield, causing an inversion for this part of the yield curve. When a shorter yield pays out more than a longer-dated yield, it indicates that investors do not want to be locked into longer maturity dates, a phenomenon often considered a leading indicator of a recession.

However, the 5-to-30 spread is not as reliable as the 3-month to 10-year yield and the 2-year to 10-year spread.

Sovereign bonds in other countries fell as well.

The sharp bond selloff pushed yields higher after having completed an H&S bottom.

The dollar opened higher and extended gains to test the Mar. 7 highs. A further climb of just 0.1% would put the greenback at its highest level since May 2020.

Dollar Index Daily

The price is bullish after the H&S continuation pattern penetrated the falling flag.

Gold fell on dollar strength.

Gold Daily

Technically, the yellow metal continued along a small H&S top after the preceding Symmetrical Triangle's implied target was reached.

Bitcoin climbed for the seventh day in a row, moving past $47,000 for the first time since Jan. 2.

Bitcoin Daily

The digital token completed a small H&S bottom, which will attempt to take on the much larger H&S top. Note the diminishing volume along with the smaller pattern.

Oil fell as the COVID resurgence in China continued and the country's extended curbs exacerbated the outlook for the spiking inflation amid the current supply chain crunch.

Up Ahead

• US consumer confidence data is published on Tuesday. 
• US JOLTS Job Openings are reported on Tuesday.
• On Wednesday, the crude oil inventory report is released. 

Market Moves

Stocks

• The STOXX 600 rose 0.7%
• Futures on the S&P 500 fell 0.2%
• Futures on the NASDAQ 100 fell 0.3%
• Futures on the Dow Jones Industrial Average fell 0.2%
• The MSCI Asia Pacific Index fell 0.8%
• The MSCI Emerging Markets Index fell 1.1%

Currencies

• The Dollar Index rose 0.4%
• The euro rose 0.1% to $1.0991
• The Japanese yen rose 1.8% to 124.28 per dollar
• The offshore yuan was little changed at 6.3887 per dollar
• The British pound fell 0.3% to $1.3142

Bonds

• The yield on 10-year Treasuries advanced three basis points to 2.51%
• Germany's 10-year yield rose two basis points to 0.60%
• Britain's 10-year yield increased three basis points to 1.72%

Commodities

• WTI crude dropped 3.67% to $109.72 a barrel
• Brent crude fell 3.6% to $116.30 a barrel
• Spot gold fell 1.2% to $1,934.42 an ounce

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