Global Markets, U.S. Futures Calm as Markets Take Breath

By Dow Jones Newswires Staff

Global markets were broadly steady as a Japan-led rally in Asian equity markets stalled in Europe and the U.S. Europe's Stoxx 600 index fell back slightly from another record high at Monday's close, while U.S. stocks traded flat premarket after a surge in tech stocks.

The dollar slipped in Asian trade on reports Chinese regulators advised investors to pull back from U.S. Treasurys before recovering, while volatile precious-metals markets steadied. Silver, for example, which has swung wildly recently, nudged down 0.5% in early European trade. Talks between the U.S. and Iran saw oil prices fall, while bitcoin showed no signs of staging a significant recovery.

Investors look ahead to the U.S. employment cost index at 1330 GMT ahead of the key nonfarm payrolls report Wednesday.

--Major U.S. indexes traded flat premarket, with the country's three blue-chip stock baskets each trading around par. After-hours trading was muted, with tech giants trading up or down less than 1%.

--Asian markets climbed across the board Tuesday, with major markets posting gains. Japan's Nikkei 225 extended its recent rally, climbing 2.3% to the close as optimism around Prime Minister Sanae Takaichi's election victory lifted sentiment. Gains were more modest elsewhere. The Hang Seng Tech Index was 0.5% higher, led by gains in biotech stocks. China's Shanghai Composite Index ended 0.1% higher. Technology stocks in Hong Kong and mainland rebounded slightly, following U.S. tech gains Monday. South Korea's Kospi finished 0.1% higher, while Thailand's benchmark SET Index rose 0.4%.

--Europe's blue-chip indexes opened largely down. The French CAC 40 was one climber, gaining 0.5% as key luxury stocks rallied. Kering surged just shy of 14% as sale trends picked up. In Milan, the FTSE MIB fell 0.3% despite gains for luxuries--Brunello Cucinelli was up 3%--as banks declined, with Banca MPS down 3.05% after earnings. Banks also dragged Germany's DAX down 0.2%, with Allianz falling 2.5%. Automakers and chemicals companies in the index gained, however. In the U.K., oil supermajor BP tumbled 4.4% after pausing its share buyback program, while Standard Chartered was down 4.2% after the unexpected departure of its chief financial officer. The FTSE 100 slipped 0.3%. Spain's IBEX 35 declined 0.2%, with financial stocks weighing on the index.

--The dollar recovered only marginally after reaching a one-and-a-half-week low overnight on concerns about the selling of U.S. assets. These concerns were triggered by a Bloomberg report that said Chinese regulators advised financial institutions to reduce their exposure to U.S. Treasury holdings. Elsewhere, Federal Reserve governor Stephen Miran played down the dollar's recent weakness. He said the dollar would need to register a steeper fall than it already has for it to affect inflation. The yuan traded at its strongest levels against the dollar since May 2023 in Asian hours. The DXY dollar index rose 0.1% to 96.925, having reached a low of 96.791 overnight.

--U.S. Treasury yields fell in Asian trade, with attention shifting to Wednesday's release of January employment data. The two-year Treasury yield declined 0.6 basis points to 3.476%, while the 10-year yield fell 1 bp to 4.186%, according to Tradeweb.

The 10-year Bund yield declined 1.1 bps to 2.828%. Yields on U.K. government bonds fell back after U.K. Prime Minister Keir Starmer reinforced his position as leader for now. Senior politicians in the ruling Labour Party expressed their support for Starmer Monday, helping to calm investor nerves. Ten-year gilt yields fell 3 basis points to last trade at 4.501%.

--Bitcoin dropped as confidence in cryptocurrencies remained weak after last week's selloff. While crypto prices have recovered from last week's lows, there still seems to be no rush to pick up coins on the cheap, IG analyst Chris Beauchamp said in a note. "Gold's recovery back above $5,000 threatens to stymie any crypto rebound before it even gets going," he said. Bitcoin fell 2.3% to $68,708, according to LSEG. It reached a 16-month low of $60,008 on Friday.

--Oil prices slipped in early trading after rising more than 1% in the previous session, with focus on U.S.-Iran developments. Brent crude was down 0.2% to $68.92 a barrel, while WTI fell 0.3% to $63.59 a barrel. "Prices are struggling to break convincingly above $70 amid speculation that the risk of higher oil prices--and the impact of rising fuel costs--could ultimately push President Trump toward a negotiated settlement with Iran," analysts at Saxo Bank said. The benchmarks traded higher on Monday after the U.S. Transportation Department said American-flagged commercial vessels crossing the Strait of Hormuz should stay as far as possible from Iranian waters.

--Gold prices edged lower in early trading but remain above the $5,000 mark. New York futures were down 0.4% to $5,059 a troy ounce. "Despite the rebound, price action continues to look positioning-driven rather than fundamentally new, with volatility still acting as a deterrent to broader participation," analysts at Sucden Financial said. "High margin requirements and elevated hedging costs are limiting the return of more commercial flows." Meanwhile, silver futures fell 0.5% to $81.82 an ounce.

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(END) Dow Jones Newswires

02-10-26 0443ET