(Bloomberg) — U.S. stock futures rose as traders took comfort in the Federal Reserve’s signal that it has no plans to raise interest rates and looked to Apple Inc.’s upcoming earnings.
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S&P 500 contracts rose 0.6%, with Apple, Amazon.com Inc. and Nvidia Corp. posted small profits in pre-market trading. The yen was the center of attention in currency trading, posting another day of wide swings amid speculation that Japanese authorities had intervened to support the currency.
Markets are celebrating the fact that the Fed has taken a more dovish tone than some expected, even after numerous statistics pointed to persistent inflationary pressures. Chairman Jerome Powell said it was unlikely the central bank’s next move would be to raise interest rates and said authorities would need to provide convincing evidence that monetary policy was not tight enough to keep inflation heading back towards the second quarter -percent target.
“Overall, it’s a positive message for markets,” said Benjamin Melman, chief investment officer at Edmond de Rothschild Asset Management. “We have confirmation that Powell does not want to raise interest rates.”
Further insight into the health of the US economy will be provided by initial jobless claims and factory orders on Thursday. However, the focus will be on the April non-farm payrolls data due at the end of the week. A model from Bloomberg Economics suggests the unemployment rate remains unchanged at 3.8%. That suggests that “hiring likely remains too hot for the Fed,” economists Andrej Sokol and Scott Johnson wrote in a note.
Apple’s numbers, coming after the U.S. market closes, will give investors a better sense of how the iPhone maker is weathering a sales decline driven in part by a sluggish Chinese market.
“Earnings appear to be quite stable and quite constructive on the equity side,” John Woods, CIO for Asia Pacific at Lombard Odier, said in an interview with Bloomberg Television. “Right now it’s predominantly a US story.”
In Europe, stocks saw slight moves amid mixed corporate reports. Drugmaker Novo Nordisk A/S fell on disappointing results and transportation giant Moller-Maersk A/S fell 4%. Shell Plc rose after the energy producer posted a rise in profits and announced a $3.5 billion share buyback.
Yen slide
The Japanese yen fell as much as 1.1% against the dollar after a late rise in New York on Wednesday. The fresh decline suggests investors are skeptical that Japanese authorities can prevent a weakening of the currency given the country’s wide interest rate differential with the United States.
The Hang Seng Index rose more than 2%, putting it on track to enter a technical bull market. Hong Kong’s currency peg to the US dollar increases its appeal as a haven amid the threat of longer-term rising US interest rates.
In commodities, oil recovered its losses from Wednesday and gold gained.
Important events this week:
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U.S. factory orders, initial jobless claims, trading, Thursday
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Apple earnings, Thursday
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Unemployment in the Eurozone, Friday
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US Unemployment, Non-Farm Payrolls, ISM Services, Friday
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Chicago Fed President Austan Goolsbee speaks Friday
Some of the key moves in the markets:
Shares
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The Stoxx Europe 600 fell 0.2% at 10:17 a.m. London time
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S&P 500 futures rose 0.4%
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Nasdaq 100 futures rose 0.6%
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Futures on the Dow Jones Industrial Average rose 0.2%
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The MSCI Asia Pacific Index rose 1%
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The MSCI Emerging Markets Index rose 0.5%
Currencies
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The Bloomberg Dollar Spot Index fell 0.5%
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The euro was little changed at $1.0709
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The Japanese yen fell 0.4% to 155.17 per dollar
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The offshore yuan was little changed at 7.2288 per dollar
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The British pound was little changed at $1.2530
Cryptocurrencies
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Bitcoin rose 0.7% to $57,705.13
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Ether was little changed at $2,936.74
Tie up
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The 10-year Treasury yield fell two basis points to 4.61%
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The yield on 10-year German government bonds fell four basis points to 2.55%
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The 10-year UK government bond yield fell six basis points to 4.31%
raw materials
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Brent crude rose 0.9% to $84.35 a barrel
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Spot gold fell 0.6% to $2,304.86 an ounce
This story was produced with support from Bloomberg Automation.
– With support from Winnie Hsu, Richard Henderson and Catherine Bosley.
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