US futures drift as dollar drops with Treasuries, euro climbs

Bloomberg

US equity futures drifted and stocks mostly slipped in Europe and Asia on the penultimate day of a blockbuster year for markets. The dollar weakened, and Treasuries extended their declines.
Contracts on three main US stock indexes were steady, signalling the gauges may open near their record highs in the countdown to the New Year’s Day holiday on Wednesday. Tech giants Facebook Inc and Amazon.com Inc edged lower in pre-market trading. Declines in telecommunications and carmaker shares led the Stoxx Europe 600 Index lower.
The yen and euro joined other major currencies strengthening against the dollar, along with most emerging-market peers, from Russia’s ruble to the Thai baht. German bunds and UK gilts declined along with Treasuries, with the 10-year benchmark note’s yield rising to about 1.92%, still down about 75 basis points from where it began 2019.
Investors are acting with caution in thin pre-holiday trading at the end of a year that’s propelled global equity benchmarks to record highs. With a backdrop of persistent central bank stimulus and the anticipated sealing of a US-China interim trade deal in January, many market participants say they’re still bullish for early 2020.
“As fears of a global recession have dissipated and the manufacturing cycle looks to be heading for a U-turn in the first half of 2020, expect to see some rotation from the US into emerging and European markets,” Hussein Sayed, chief market strategist at online brokerage ForexTime Ltd., said in a note to investors. “If this scenario plays out, expect the dollar to remain under pressure for the next couple of weeks.”
Elsewhere, oil futures traded in New York nudged higher toward $62 a barrel.
Earlier in Asia, shares dipped in most of the biggest markets. The exceptions were in Hong Kong and China, where brokerage stocks rallied after the legislature approved legal changes that may make it easier for new firms to trade. Citic Securities Co surged by the 10% daily limit at the close in Shanghai.
Futures on the S&P 500 Index increased 0.1% as of 7:23 am New York time. The Stoxx Europe 600 Index declined 0.3%.The Shanghai Composite Index gained 1.2%. The MSCI Asia Pacific Index was little changed.
The Bloomberg Dollar Spot Index dipped 0.2%.The British pound rose 0.4%. The euro climbed 0.1% to $1.1191.The Japanese yen strengthened 0.2% to 109.18 per dollar. The South Korean Won appreciated 0.4% to 1,156.18 per dollar.

Bonds
The yield on 10-year Treasuries increased four basis points to 1.92%. Germany’s 10-year yield jumped seven basis points to -0.19%. Britain’s 10-year yield climbed nine basis points to 0.843%. France’s 10-year yield climbed six basis points to 0.113%.
West Texas Intermediate crude gained 0.6% to $62.09 a barrel. Gold climbed 0.1% to $1,511.88 an ounce. Iron ore increased 0.2% to $90.25 per metric ton.