(Bloomberg) — European stocks look poised to open lower, a sign of caution before the release of data from eurozone inflation to US job openings later Tuesday.
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The Euro Stoxx 50 futures dropped 0.5%, with their US peers also slipping. The weak tone comes in contrast with the modest gains in Asian shares that were mostly driven by a rise in chip-related stocks. The strength in the semiconductor sector came after Nvidia Corp. chief Jensen Huang unveiled new products that rekindled optimism over AI demand.
In the broader market, traders are still grappling with the prospect of rising trade tensions after Donald Trump denied a report that he might moderate plans for across-the-board tariffs when he retakes the White House. Washington’s latest move to blacklist some Chinese companies, including tech behemoth Tencent Holdings Ltd., is another reminder of the growing frictions that may further darken the outlook for the world’s No. 2 economy.
Tencent fell as much as 8%, with Contemporary Amperex Technology Co. down over 6% after the Pentagon included them in a list that labeled several Chinese firms military entities.
The yen was also in focus. It regained some ground after Japanese Finance Minister Katsunobu Kato said he will take appropriate action against what he considers one-sided, sudden foreign exchange moves. The currency dropped 0.1% to 157.80 per dollar after falling to 158.42, its weakest since July.
“Asia strength today is being led by tech and semis in Japan and Taiwan, with sentiment helped by last night’s SOX strength,” said Kieran Calder, head of equity research for Asia at Union Bancaire Privee.
During his speech, Nvidia’s Huang announced updated GeForce graphics processors for gaming PCs, part of a keynote presentation that’s expected to include a wide swath of new products.
An index of dollar strength has pared losses after Trump’s denial. The US currency fell as much as 1% Monday before narrowing the loss to 0.6%. It fell slightly on Tuesday.
Treasuries edged higher in Asia after the yield on the 30-year note climbed to the highest in more than a year on Monday, while that on the benchmark 10-year paper rose three basis points to 4.63%.
The Canadian dollar turned flat after advancing following Prime Minister Justin Trudeau’s resignation as head of the Liberal Party.
Elsewhere, global credit markets, which are historically busy at the start of the year, have been particularly hot out of the gates with spreads near their lowest in 17 years. Borrowers from the Asia Pacific sold about $7 billion of dollar-denominated debt on Monday, the most since last June. The charge is set to continue Tuesday, with about a dozen APAC issuers having mandated banks for possible debt sales or marketing notes in the US currency.
Also on investors’ minds is Friday’s US jobs report that is expected to show employers tempered hiring to wrap up a year of moderating yet still-healthy labor market. The data is unlikely to alter the view of Fed officials that they can slow the pace of rate cuts amid a durable economy and inflation that’s dissipating only gradually.
Fed Governor Lisa Cook said Monday that policymakers can proceed more cautiously amid a sturdy labor market and lingering inflation pressures.
Meanwhile, Bitcoin topped $100,000. Oil steadied after its first drop in six sessions, as technical markers showed the recent rally may have gone too far.
Key events this week:
Eurozone CPI, unemployment, Tuesday
US job openings, trade, ISM services, Tuesday
Fed’s Thomas Barkin speaks, Tuesday
Eurozone PPI, consumer confidence, Wednesday
US ADP employment, Fed minutes, consumer credit, Wednesday
Fed’s Christopher Waller speaks, Wednesday
China CPI, PPI, Thursday
Eurozone retail sales, Thursday
US state funeral and national day of mourning for former President Jimmy Carter is a federal holiday, Thursday
Fed’s Patrick Harker, Thomas Barkin, Jeff Schmid and Michelle Bowman speak, Thursday
Japan household spending, leading index, Friday
US jobs report, consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 6:30 a.m. London time
Nasdaq 100 futures fell 0.2%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.4%
The MSCI Emerging Markets Index was little changed
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro was little changed at $1.0400
The Japanese yen fell 0.1% to 157.81 per dollar
The offshore yuan rose 0.1% to 7.3381 per dollar
The British pound rose 0.2% to $1.2543
Cryptocurrencies
Bitcoin rose 0.2% to $101,865.67
Ether rose 0.1% to $3,672.75
Bonds
The yield on 10-year Treasuries declined two basis points to 4.61%
Germany’s 10-year yield advanced two basis points to 2.45%
Britain’s 10-year yield advanced two basis points to 4.61%
Commodities
Brent crude was little changed
Spot gold rose 0.3% to $2,645.52 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson and Toshiro Hasegawa.
