SINAGPORE, June 4 — Asian index futures signaled gains, while the euro held near a two-week high as investors weighed a flare up in the global bond rout with the outlook for a Greek debt deal. New Zealand notes fell and crude oil maintained losses.
Futures on equity gauges from Japan to Hong Kong climbed at least 0.1 per cent in recent trading, while contracts on the Standard & Poor’s 500 Index were little changed by 7:51am in Tokyo.
The euro was steady at US$1.1260 (RM4.152) after a two-day gain of more than 3 per cent.
Yields on 10-year New Zealand government bonds climbed a third day, adding six basis points after a surge in US and German rates. US oil lost less than 0.1 per cent to US$59.64 a barrel with OPEC to meet in Vienna tomorrow.
Mario Draghi inflamed global bond losses, helping send 10- year German bund yields up another 17 basis points as the European Central Bank chief warned about ongoing volatility in the market and forecast faster inflation. German Chancellor Angela Merkel is intensifying efforts to secure a deal for Greece.
The country’s bailout expires this month and the first of four repayments to the International Monetary Fund are due tomorrow.
Bank of Japan head Haruhiko Kuroda speaks today.
“The recent bond-market selloff has to some extent reflected the pricing out of deflation risks, and that by itself is something that share investors should welcome,” Matthew Sherwood, head of investment markets research at Perpetual Ltd, which manages about US$21 billion, wrote in an e-mail.
“Greece has not yet missed a debt repayment during its bailout programme, and even if they did miss tomorrow’s 300 million-euro repayment to the IMF, that does not automatically trigger a cross-default on all debt. Many countries have been late on IMF repayments before.”
Bond yields
New Zealand bonds due in a decade yielded 3.80 per cent, near their highest level this year, after rates on 10-year Treasury notes jumped 10 basis points to 2.37 per cent. Rates on similar-maturity German bunds surged to 0.88 per cent, their highest level in 2015.
Draghi told reporters in Frankfurt yesterday that markets must get used to periods of higher volatility, and that inflation in the 19-nation euro area has bottomed out and should continue to pick up. The ECB kept key interest rates on hold at its meeting.
US stocks pared early gains, with the S&P 500 ending the New York session up 0.2 per cent, after earlier rising as much as 0.6 per cent.
The Asian futures market foreshadowed a rebound in the region’s stocks, with the MSCI Asia Pacific Index falling the past three days.
Nikkei futures
Nikkei 225 Stock Average futures climbed 0.3 per cent to 20,560 by 3am in Osaka, while contracts traded in Chicago were down 0.1 per cent to 20,560 after gaining 0.8 per cent in the previous session. The yen was little changed at 124.34 per dollar after retreating 0.1 per cent yesterday.
Futures on Australia’s S&P/ASX 200 Index advanced 0.1 per cent with contracts on the Kospi index in Seoul. Hang Seng Index futures rose 0.4 per cent and contracts on the Hang Seng China Enterprises Index were up 0.5 per cent. Singapore-traded futures on the FTSE China A50 Index increased 0.5 per cent.
The Shanghai Composite Index was little changed yesterday following a two-day climb of more than 6 per cent.
The S&P 500 hasn’t had back-to-back gains in more than two weeks, and is down 0.8 per cent from its May 21 record amid mixed economic data as investors mull the outlook for higher US interest rates this year.
Data yesterday indicated service industries expanded in May at the slowest pace in 13 months as orders eased, while companies added more workers in May than the prior month, according to private data, a sign US job growth may be getting back on track. Monthly Labor Department data tomorrow may show a 227,000 increase in nonfarm payrolls.
The Organization for Economic Cooperation and Development cut its global growth forecast, saying risks including a possible Greek default are hurting confidence and big companies are reluctant to invest. — Bloomberg
