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U.S., European Futures Drop; Treasuries Advance: Markets Wrap

U.S., European Futures Drop; Treasuries Advance: Markets Wrap

(Bloomberg) — U.S. and European equity futures dropped, and Treasuries advanced, as optimism over policy stimulus gave way to recovery concerns caused by rising infection numbers in some locations.

Asian stocks were mostly lower in thin trading, with modest declines in Tokyo, Seoul and Hong Kong. Australian equities underperformed and Australia’s dollar fell after the country reported a much bigger decline in employment than forecast for May. Crude oil prices retreated. S&P 500 futures fell after the index closed down on Wednesday.

“The narrative around policy stimulus and better economic data seems to be losing its sway,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

The yuan ticked up and Chinese shares pared losses after China’s central bank governor said he wants the flow of credit in the economy to increase to at least 30 trillion yuan ($4.2 trillion) this year.

On the virus front, Texas reported an 11% surge in hospitalizations, the biggest 24-hour increase since June 4. Brazil registered a record 34,918 new infections, while China is escalating containment measures in Beijing including canceling flights.

Thin volume in U.S. equities on Wednesday exacerbated swings, including a drop that began around the time newspapers published summaries of John Bolton’s critical book about President Donald Trump.

These are some key events coming up:

Policy decisions from the Bank of England and the Swiss National Bank are due on Thursday.

These are some of the main moves in markets:

Stocks

Futures on the S&P 500 retreated 0.7% as of 7:13 a.m. in London. The index fell 0.4% Wednesday.Euro Stoxx 50 futures slid 0.9%.Japan’s Topix index fell 0.3%.Hong Kong’s Hang Seng index fell 0.6%.South Korea’s Kospi lost 0.5%.Shanghai Composite was little changed.MSCI Asia Pacific Index fell 0.9%.

Currencies

The yen was at 106.88 per dollar, up 0.1%.The offshore yuan was at 7.0700 per dollar, up 0.1%.The euro bought $1.1250, little changed.

Bonds

Ten-year U.S. Treasury yields fell about three basis points to 0.71%.Australia’s 10-year yield fell four basis points to 0.88%.

Commodities

West Texas Intermediate crude oil retreated 1.2% to $37.51 a barrel.Gold was at $1,727 an ounce.

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