U.S. stock-index futures advanced and the dollar headed for the longest rally since October against the yen as speculation grew the world’s largest economy is strong enough to withstand another interest-rate increase. Oil rose for the first time in three days, sending Russia’s ruble toward the biggest gain in more than a week.
Contracts on the Standard & Poor’s 500 Index expiring in June climbed 0.3 percent at 7:43 a.m. in New York, indicating the equities benchmark will rebound from the first weekly loss since Feb. 12.
The dollar strengthened against the yen for a seventh day, while losing ground against the British pound the Australian dollar. Treasuries slipped after data on Friday showed the U.S. economy expanded more than previously estimated. The weaker yen spurred gains in Japanese shares. Trading volumes dropped as many financial markets remained shut in Europe for Easter holidays.
Investors are becoming emboldened to fish for riskier assets as the Federal Reserve continues to give dovish signals in the face of a resilient American economy, even as growth slows in China and political upheavals rock emerging markets from Brazil to Turkey. Fed Bank of San Francisco President John Williams said global developments were “the real issue” for policy makers as they deliberate on the pace of rate increases.
“U.S. futures are looking strong today on better news of the U.S. economy,” said Frances Hudson, an Edinburgh-based strategist at Standard Life Investments Ltd., which oversees $393 billion. “The market is focused on the timing of the next rate hike. It’s an ‘all’s-right-with-the-world’ scenario, and if the U.S. economy is strong enough for them to raise rates next month that will be taken as a positive.”
S&P 500 futures climbed on Monday after the stocks index fell 0.7 percent last week, halting a rally that added more than $2 trillion to the value of U.S. stocks. The losses came amid a chorus of policy makers signaling that the central bank stands ready to raise rates as soon as the data warrant. New York trading resumes Monday after closing on Friday.
Ford Motor Co. gained 2.4 percent in pre-market trading in New York after a report that the automaker may benefit from potential car subsidies in Russia.
In Tokyo, the benchmark Topix rose 1.2 percent. While the stronger dollar has weighed on Asian shares, pressuring raw-material stocks, the corresponding weakness in the yen helped Japanese shares notch their first weekly gain in three weeks. The Topix index is headed for its first monthly advance this year, with a gain of 6.5 percent.
Prime Minister Shinzo Abe plans to announce in May his intention to delay the scheduled April 2017 consumption-tax increase to 10 percent from 8 percent, according to the Sankei newspaper. The premier may also release a package of new spending measures on Tuesday to boost the economy, and also say he plans to allow the government to finance more projects this year, according to the Nikkei newspaper.
The Shanghai Composite Index dropped 0.7 percent, after capping its second weekly gain. The gauge was up as much as 1 percent earlier in the day, after the National Bureau of Statistics said on Sunday that industrial profits broke a seven-month losing run to climb 4.8 percent from a year earlier in the January-February period.
China’s benchmark index has rebounded 11 percent from a January low as regulators eased rules to allow investors to buy stocks with borrowed money and investors speculated the government was propping up equities during this month’s National People’s Congress.
Stock volumes fell across Asia and Europe. Trading in Topix shares was 23 percent below the daily average over the past 30 days, while it was 42 percent lower for Russia’s dollar-denominated RTS Index.
The dollar rose 0.4 percent against the yen amid bets U.S. payrolls data on April 1 will persuade monetary authorities to widen the divergence between policy in the nation and Japan. The Bloomberg Dollar Spot Index was little changed after the biggest weekly increase since Nov. 6.
“We’re now more conscious that there’s strength in the U.S. economy,” said Yoshinori Ogawa, a market strategist at Okasan Securities Co. in Tokyo. “There were some views that the U.S. won’t be able to raise rates on economic concern, so the weakening dollar should take a break.”
The ruble gained 0.5 percent against the dollar, rising for a third day. Indonesia’s rupiah weakened 0.7 percent, touching a one-month low.
Gold slid as the dollar’s rally undermined demand for the metal as an alternative investment asset. Futures fell 0.3 percent to $1,217.90 an ounce. The spot price lost 3.1 percent last week, the most since November.
Oil futures advanced 0.4 percent in New York, paring a 4.8 percent loss in the previous two sessions. Rigs targeting oil in the U.S. fell by 15 to 372, according to Baker Hughes Inc. More than 150 have been parked since the start of the year.
Oil has climbed back from a 12-year low earlier this year on speculation the global surplus will ease as U.S. output declines and major producers including Saudi Arabia and Russia proposed an output freeze. Iran and Libya are the only two OPEC members that haven’t pledged to attend production cap talks next month.