European equities are anticipated to open with modest gains following a retreat in Asian shares, driven by concerns over solid economic readings and higher commodities prices, which have sparked speculation of prolonged higher interest rates.
Euro Stoxx 50 futures remained relatively unchanged, while US contracts extended losses during Asian trading hours after the S&P 500 experienced a 0.7% decline overnight. Treasuries displayed stability after a recent surge in yields on Tuesday, with the 10-year yield hitting its highest level since November.
In Asia, South Korean and Hong Kong benchmarks led the regional gauge’s decline. Mainland Chinese shares resumed their downward trend despite a report indicating expansion in the Caixin purchasing managers’ indexes, failing to provide a fresh catalyst for market sentiment.
Despite strong gains in the previous quarter, global equities have struggled to maintain momentum, with benchmark indices from Tokyo to New York largely trading within a range this week as investors reassess their stance on interest rates.
Jun Rong Yeap, a strategist at IG Asia Pte, commented, “We expect the cautious risk environment to persist into this Friday’s US non-farm payroll data release as the ‘good news is bad news’ mantra continues to play out.” Yeap emphasized the significance of the upcoming data in influencing market rate views.
