Treasury yields were slightly lower early in Europe after stabilizing in the previous session, after President Trump’s tax bill was passed by the U.S. House of Representatives. Investor concerns about a ballooning budget deficit, however, remain.
The dollar continued to edge lower, while global stock markets were struggling for meaningful direction following a mixed close on Wall Street.
–U.S. Treasury yields eased, particularly in long-dated maturities, with the 30-year yield last down 2.6 basis points at 5.038%, according to LSEG data. The two-year yield fell 1 basis point to 3.985% and the 10-year edged down 2.4 basis points to 4.528%. Still, long-dated yields look prone to further rises, driven partly by fading confidence in U.S. policy, SEB Research’s Jussi Hiljanen said in a note. “An erosion of trust in U.S. policy, unattractive valuations when accounting for FX hedging costs, and rotation into European bonds suggest structural upside pressure on long U.S. yields,” the chief rates strategist said.
–The dollar continued to edge lower, with the DXY dollar index against a basket of major currencies down 0.3% to 99.6710.
–Bitcoin eased slightly after hitting a fresh record high Thursday as investors seek alternatives to the dollar. Trump held a private event Thursday night for investors of his meme coin where he reaffirmed his aim to make the U.S. the crypto capital of the world. Bitcoin was recently down 0.5% to $110,514 after reaching a high of $111,965 Thursday, according to LSEG.
–On the stocks front, and ahead of Monday’s Memorial Day public holiday, U.S. stock futures pointed to very slight gains at Friday’s open, with futures for the S&P 500, Dow Jones Industrial Average and Nasdaq edging up between 0.1% and 0.2%.
–European stock markets started cautiously higher, with the Stoxx Europe 600 gaining 0.2% in morning trading. France’s CAC 40 increased 0.2% and Germany’s DAX climbed 0.3%. The U.K.’s FTSE 100 added 0.3%.
–Stocks in Asia ended mixed with Japan’s Nikkei 225 index climbing 0.5%. Hong Kong’s Hang Seng closed flat while China’s benchmark Shanghai Composite declined 0.9%. Australia’s S&P/ASX 200 Benchmark Index increased 0.1% and South Korea’s Kospi ended down 0.1%.
–Oil prices were poised for a weekly decline, pressured by fears of another large OPEC+ output hike at a time when the market is already facing excess supply. Brent crude and WTI were both down 0.8% to $63.91 and $60.66 a barrel, respectively. “The oil market is under renewed pressure as noise builds around what OPEC+ will do with their July output levels,” analysts at ING said in a note.
–Gold, meanwhile, was on track to post a weekly gain of more than 3%, supported by a softer U.S. dollar, with futures recently up 1.1% to $3,331 a troy ounce.
Write to Barcelona Editors at barcelonaeditors@dowjones.com