U.S. futures and global markets were broadly down as peace talks dragged on European stocks and concerns around AI continued to weigh on markets. Investors also await key economic data from the U.S., Europe and Japan, with nonfarm payroll data for October and November expected to land at 1330 GMT. European and U.K. PMIs come ahead of central-bank decisions across the continent Thursday, while the Bank of Japan meets Thursday to discuss a potential rates hike.
–U.S. futures were down as investors await a bumper installment of jobs data as well as retail sales data for October. The tech-heavy Nasdaq fell 0.65% premarket as AI-related stocks continue to slide, while futures for the S&P 500 and Dow Jones Industrial Average fell 0.25% and 0.4% respectively.
–Chinese shares ended lower on continued weak sentiment, despite government commitments to boost domestic demand. The Shanghai Composite Index fell 1.1% to 3824.81, the Shenzhen Composite Index lost 1.5%, and the ChiNext Price Index shed 2.1%. A cut in risk appetite spurred by fears over AI stocks fed into Asian markets, with Hong Kong’s Hang Seng declining 1.5% as shares in Semiconductor Manufacturing International fell 1.9%. Elsewhere, Japan’s Nikkei 225 index dropped 1.6%, while the yen strengthened 0.2% against the dollar to Y154.85. The 10-year Japanese government bond yield held steady at 1.959%.
–European indexes opened mostly lower as defense stocks stumbled. The German DAX dropped 0.55% in part due to Rheinmetall, which fell 3.65%. The U.K.’s FTSE 100 dropped 0.2% as BAE Systems and Babcock fell 2.4% and 2%, respectively. Gains for banks pulled both Italy’s FTSE MIB and the Spanish IBEX 35 up, with the indexes both gaining 0.2% despite big falls for defense companies. Elsewhere, concerns over AI companies held the French CAC to par as STMicroelectronics dropped 2.7%, while the Dutch AEX shed 0.6% on losses for its microchip-related manufacturers.
–The DXY dollar index traded flat at 98.286, close to the almost eight-week low of 98.134 reached on Thursday.
–The euro was flat at 0.8787 pounds, while sterling fell 0.1% against the dollar to $1.3363 after U.K. jobs data showed wage growth exceeded estimates in the three months to October.
–U.S. Treasury yields declined in Asian afternoon trade, with the market anticipating data that will confirm labor-market weakness. The two-year Treasury yield fell 1.5 bps to 3.492%, while the 10-year yield also fell 1.5 bps to 4.165%.
–Eurozone government bond yields were little changed at opening, as investors await flash estimate purchasing managers data for France, Germany and the eurozone. The 10-year German Bund yield was up 0.2 bp at 2.847%.
–Bitcoin fell 0.2% to $86,032, having reached a two-week low of $85,264 Monday, as investors trim exposures to risky assets.
–Oil prices fell, extending the previous session’s losses as negotiations to end the war in Ukraine progress. Brent crude was down 1% to $59.94 a barrel, while WTI declined 1.1% to $56.06 a barrel, its lowest level since 2021. The benchmarks have fallen 20% so far this year, pressured by prospects of an oversupplied market and softening demand.
–Gold prices slipped as investors booked profits ahead of key U.S. data. Futures in New York fell 0.7% to $4,305 a troy ounce, though prices remain near October’s record highs supported by expectations of further easing of U.S. interest rates next year and sustained investor demand.
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