Stocks, futures fall with bonds on hawkish bets, oil advances

Bloomberg

Stocks fell with US futures and Treasuries extended a selloff as investors bet monetary policy will be more hawkish than previously expected. Oil rose after Russia said it will cut output.
Tech and health-care sectors were among the worst performers in European equities, while the region’s bonds also fell. Adidas AG slumped as it warned of losses after ending ties with rapper Ye. Contracts on U.S. gauges also fell, with Lyft Inc. tumbling in premarket trading after its outlook disappointed analysts.
In Japan, the yen initially jumped on media reports of a surprise nomination for Kazuo Ueda to take helm at the Bank of Japan — suggesting investors saw the move as hawkish. The currency later pared gains after Ueda said it’s important to keep BOJ easing for now.
US Treasuries extended losses after investors pushed yields on the two-year Treasury above the 10-year’s by the most since the early 1980s, a sign of flagging confidence in the economy’s ability to withstand additional Federal Reserve hikes.
Stocks are heading for their first weekly decline in three after a chorus of Fed speakers reinforced the need to keep raising rates for longer, quashing some of the optimism that spurred a powerful rally in January. Investors will closely watch economic data for policy clues after last week’s strong US payrolls report, particularly
inflation data due next week.
Next week’s inflation update from the US offers a relevant potential inflection point in the Treasury yield curve, according to Benjamin Jeffery and Ian Lyngen, strategists at BMO Capital Markets Corp.
“Our expectations are that the market takes away sufficient angst regarding the prevailing inflation trend to press the inversion trade even further,” they wrote in a note.
Earnings also remained in focus. PayPal Holdings Inc. gained on better-than-forecast guidance, while News Corp. fell as its profit missed projections.
Elsewhere, oil jumped after Russia said it plans to cut March production by 500,000 barrels a day.
Gilt yields climbed after data showed the UK narrowly avoided a recession last year. Bitcoin steadied after a Thursday’s biggest one-day drop since November.
The Stoxx Europe 600 fell 1% as of 10:12 am London time and S&P 500 futures fell 0.4%.
While Nasdaq 100 futures fell 0.8%, futures on the Dow Jones Industrial Average also drop 0.2%. The MSCI Asia Pacific Index fell 0.8% and the MSCI Emerging Markets Index also plunges 1.1%.
While the Bloomberg Dollar Spot Index rose 0.1%, the euro fell 0.4% to $1.0696 and the Japanese yen rose 0.3% to 131.15 per dollar. The offshore yuan fell 0.4% to 6.8169 per dollar and the British pound fell 0.3% to $1.2085.
The yield on 10-year Treasuries advanced three basis points to 3.68% and Germany’s 10-year yield advanced five basis points to 2.35%. Britain’s 10-year yield advanced seven basis points to 3.36%.