US futures decline, stocks steady as crude advances

Bloomberg

US equity futures slipped on Friday and Asian stocks were steady as traders weighed mixed signals from the peace talks between Russia and Ukraine that are pushing oil further above $100 a barrel.
European contracts wavered and those for the S&P 500 and Nasdaq 100 dipped following the best three-day rally in US shares since 2020. An Asian equity gauge made modest gains.
Chinese technology stocks came off session lows and mainland shares pushed higher, aided by Beijing’s vow this week to create market stability. There was speculation that the nation’s central bank may soon ease the monetary
policy.
The war in Ukraine and the sanctions imposed on Russia continue to shape sentiment. JPMorgan Chase & Co. processed funds for interest payments due on Russian government dollar bonds, easing some fears of a default.
Oil extended a surge after the Kremlin cast doubt on how much progress ongoing cease-fire talks are making. The war has severely disrupted Russian crude flows. The Pentagon warned Russian President Vladimir Putin may threaten to use nuclear weapons if the conflict drags on.
Treasuries and the dollar were steady and commodity-linked currencies strengthened. The yen slid to around its weakest point versus the greenback in six years after the Bank of Japan stuck with its dovish policy stance.
Global stocks have rebounded in recent days, putting them on course for their best week since November 2020. That suggests some of the worst fears about the inflationary commodity shock and hit to confidence from the war have eased. At the same time, the continued fighting and tightening Federal Reserve monetary policy point to the likelihood of more cross-asset swings ahead.
“I don’t necessarily expect the rest of the year to be that easy,” Lori Calvasina, head of US equity strategy at RBC Capital Markets LLC, said on Bloomberg Television. “Volatility is likely to stay elevated for quite some time” even as sentiment gauges “have been a screaming buy in some respects for quite some time.”
President Joe Biden and his Chinese counterpart Xi Jinping are due to discuss the war. The Biden administration is concerned that Xi may be moving closer to supporting Moscow. The US president was to warn of “costs” if China backs Russia, Secretary of State Antony Blinken said.
US lawmakers voted to end regular trade ties with Russia, paving the way for sharply higher tariffs on Russian goods. Meanwhile, S&P Global Ratings cut Russia’s credit score, saying its debt is “highly vulnerable to nonpayment.”
Meanwhile, investors were also evaluating Xi’s pledge to reduce the economic impact of his Covid-fighting measures. The move may signal a shift in a longstanding strategy that has minimized fatalities but weighed heavily on China’s economy.
S&P 500 futures fall 0.4% as of 7:03 am in London and the S&P 500 rises 1.2%.
While Nasdaq 100 futures lost 0.7%, the Nasdaq 100 climbs 1.2%. Japan’s Topix index climbed 0.5% and South Korea’s Kospi index increased as much as 0.5%.
While Australia’s S&P/ASX 200 index added 0.6%, China’s Shanghai Composite index jumps 1.1%. Hong Kong’s Hang Seng index shed as much as 0.1% and Euro Stoxx 50
futures increased 0.1%.
While the Bloomberg Dollar Spot Index was steady, the euro was at $1.1089 and the Japanese yen was at 118.86 per dollar, down 0.2%. The offshore yuan was at 6.3650 per dollar.
The yield on 10-year Treasuries was up one basis point at 2.18% and Australia’s 10-year yield added seven basis points to reach 2.58%.
While West Texas Intermediate crude rises 2.9% to $105.95 a barrel, gold was at $1,935.13 an ounce.