U.S. Futures Fall, Global Markets Mixed; Bitcoin Recovers Slightly

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U.S. Futures were down after a selloff in cryptocurrencies sent major indexes lower in the prior session, while global markets were mixed. Bitcoin recovered slightly after registering its biggest one-day decline since March on Monday as hints about another interest-rate rise from Bank of Japan Governor Kazuo Ueda dampened risk appetite.

—U.S. futures fell across the board after closing lower Monday, breaking a five-day winning streak. Futures for the tech-heavy Nasdaq were down 0.8%, the S&P 500 was 0.7% lower and the Dow Jones Industrial Index was down 0.05%. The decline in Bitcoin sent shares of crypto-focused companies including Coinbase, Robinhood and Strategy lower on Monday.

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—Most Asian shares closed mixed, with Japan’s Nikkei giving up its early gains to close flat amid worries of potential interest rate hikes amid persistently high inflation in the country. In China, the ChiNext closed 0.7% lower, while Shenzhen and Shanghai ended the day 0.7% and 0.5% lower, respectively. Hong Kong’s Hang Seng is up 0.2%.

—Most European indexes traded higher after a mixed start to the morning. Italy’s MIB and the DAX were the biggest risers—up 0.55% and 0.5%, respectively. The German index is led by Bayer, which jumped 14% after the White House backed a bid a for Supreme Court review in the Roundup case. London’s FTSE 100 index was up 0.07%, while France’s CAC 40 rose 0.25%. The Stoxx 600 index was up 0.13%.

—The dollar stayed weak after hitting a two-and-a-half-week low in the previous session on building expectations that the Federal Reserve will cut interest rates further. A worse-than-expected ISM manufacturing report Monday cemented bets that the Fed will lower rates again in December. Adding to rate-cut bets, President Trump said on Sunday that he had already chosen the successor for Fed Chair Jerome Powell. The DXY dollar index trades flat at 99.412 after hitting a low of 99.009 Monday.

—Sterling remained heavily undervalued against the euro when measured against the U.K.-German inflation-adjusted real rate differential, Convera strategist George Vessey says in a note. The euro traded flat at 0.8787 pounds.

—U.S. Treasury yields edged lower in Asian trade, reversing direction after Monday’s selloff. The previous day’s rise in yields was mostly triggered by the growing likelihood that President Trump has picked economic adviser Kevin Hassett as the next Federal Reserve Chair, although his name hasn’t been announced yet. The two-year Treasury yield fell 0.8 basis points to 3.532%, while the 10-year Treasury yield declined 1 point to 4.085%, according to Tradeweb.

—Yields on U.K. government bonds, or gilts, were little changed as markets turn calmer. On Monday, increased expectations that the Bank of Japan would raise interest rates in December caused Japanese, eurozone, U.S. and U.K. government bond yields to move higher. Ten-year gilt yields traded steady at 4.479% in early trade, after rising to a five-day high of 4.500% on Monday, Tradeweb data show.

—Bitcoin recovered slightly after Monday’s sharp losses as risky assets stabilized. Still, gains are limited and analysts say the cryptocurrency’s recovery could be shallow. Analysts cite concern that rising Japanese bond yields could lead Japanese investors to repatriate foreign investments, including in crypto, back to Japan. Bitcoin rose 0.6% to $87,030 after hitting a one-week low of $83,878, LSEG data show. It’s still down more than 30% since October’s record high of $126,223.

—Brent crude fell slightly in early trading as investors track continuing geopolitical tensions in Venezuela and Eastern Europe. The international oil benchmark, which trades on the Intercontinental Exchange, falls 0.2% to $63.02 a barrel. WTI Futures are down 0.15% at $59.23.

—Gold and silver fall back slightly in early trading, with silver retreating from record highs Monday driven by U.S. rate cut expectations for next week and supply tightness. New York gold futures are down 1.2% at $4,225.25 a troy ounce, while gold spot is 0.9% lower at $4,192.16 an ounce. New York silver futures are down 2.8% at $57.52 a troy ounce, and silver spot drops 1.9% to $56.92 an ounce. Gold hit a six-week high Monday, also driven by a weak dollar on Federal Reserve rate cut hopes.

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