U.S. Futures Dip as Oil, Gas Rise; China Data Loom: Markets Wrap

(Bloomberg) — Asian stocks look set for a muted open Monday before Chinese economic data that may shed light on the impact of Covid lockdowns. Natural gas and oil prices rose on risks stemming from Russia’s war in Ukraine.

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Equity futures slipped for Japan, while other markets including Australia, Hong Kong and many in Europe remain closed for Easter. Contracts for the S&P 500 and technology-heavy Nasdaq 100 dipped.

China is due to release quarterly growth data and activity indicators for March. Officials cut the reserve requirement ratio Friday but refrained from lowering interest rates in a cautious approach to policy easing amid inflation risks.

The possibility of a de facto European Union embargo on Russian gas and the threat of some curbs on crude in Europe’s next sanctions package bolstered both commodities. U.S. natural gas prices hit a more than 13-year high, in part as the nation exports as much liquefied natural gas as possible to help Europe.

Treasuries will resume trading nursing sharp losses from the end of last week that saw the 10-year yield climb above 2.80%. Renewed worries about price pressures and rapid Federal Reserve monetary tightening sparked the selloff. A gauge of the dollar advanced and then yen retreated.

China’s Covid-linked restrictions are snarling supply chains and stoking global inflation pressures. The latter were already exacerbated by disruptions to commodity flows due to the war and Russia’s isolation. Concern is growing that the U.S. economy faces a downturn from the Fed’s pivot toward aggressive policy tightening to contain the cost of living.

“Major regime change is rarely smooth in either geopolitics or economics, and markets are under-pricing these risks,” Eric Robertsen, chief strategist at Standard Chartered Bank Plc, wrote in a note. “We are increasingly concerned about a summer of turbulence and volatility.”

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In Shanghai, officials published plans to resume production after a prolonged lockdown. Businesses should adopt so-called closed-loop management, where workers live on-site and are tested regularly, they said.

What to watch this week:

• Earnings include American Express, Bank of America, Bank of New York Mellon, China Telecom, IBM, Johnson & Johnson, Netflix, Tesla

• China GDP, economic activity data, Monday

• Easter Monday market closures in the U.K., much of Europe

• IMF/World Bank spring meetings start, Monday

• St. Louis Fed President James Bullard to speak, Monday

• Chicago Fed President Charles Evans to speak, Tuesday

• EIA crude oil inventory report, Wednesday

• China loan prime rates, Wednesday

• Federal Reserve Beige Book, Wednesday

• French presidential election debate, Wednesday

• San Francisco Fed President Mary Daly, Chicago Fed President Charles Evans, due to speak, Wednesday

• Eurozone CPI, U.S. initial jobless claims, Thursday

• Fed Chair Jerome Powell, ECB President Christine Lagarde discuss global economy at IMF event, Thursday

• Manufacturing PMIs: Eurozone, France, Germany, U.K, Friday

• Bank of England’s Andrew Bailey to speak, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.3% as of 7:43 a.m. in Tokyo. The S&P 500 fell 1.2% on Thursday

• Nasdaq 100 futures declined 0.6%. The Nasdaq 100 fell 2.3% on Thursday

• Nikkei 225 futures dipped 0.2% earlier

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%

• The euro was at $1.0814

• The yen was at 126.63 per dollar, down 0.1%

• The offshore yuan was at 6.3810 per dollar

Commodities

• West Texas Intermediate crude rose 0.8% to $107.78 per barrel

• Gold was at $1,978.43 an ounce

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