1. U.S. Stocks Slide With Futures; Yields Drop

Stocks fell with American equity futures as investors await key U.S. jobs data at the end of a week in which fears of a growth break-out sparked volatility across markets. Treasuries rose and the dollar advanced. Europe’s Stoxx 600 index opened more than 1% lower, with every industry sector in the red. Equity futures in the U.S. slipped, with contracts on the tech-heavy Nasdaq 100 signalling more declines after a topsy-turvy week that erased this year’s gains. 

Bond yields have climbed in recent weeks on mounting expectations of stronger economic growth and price pressure, with erratic moves unsettling stocks as well.

Futures on the S&P 500 Index decreased 0.5% as of 8:33 a.m. London time.

The Stoxx Europe 600 Index fell 1%.

The MSCI Asia Pacific Index dipped 0.6%.

The MSCI Emerging Market Index declined by 0.7%.

2. Oil Soars to $65 With Saudi Limiting Supply

Oil briefly moved above $65 a barrel after OPEC+ chose not to relax supply curbs even as the global economy pulls out of its pandemic-driven slump, confounding widespread expectations the group would loosen the taps. The surprise decision spurred a wave of crude price forecast upgrades by major banks. The producer alliance agreed to hold output steady in April, while Saudi Arabia said that it will maintain its 1 million barrel-a-day voluntary production cut. West Texas Intermediate rose as much as 1.9% and Brent briefly topped $68. Crude has soared this year, shepherded higher by OPEC+ restraining supplies and the vaccine-aided recovery in consumption that’s drained inventories. The group’s decision represents a victory for Riyadh, which has advocated for tight curbs to keep prices supported.

3. Bitcoin Falls with Rising Bond Yields

Bitcoin fell for a second day amid concerns that a jump in bond yields is sapping demand for riskier investments. The largest cryptocurrency shed as much as 3.4% on Friday and was trading at about $47,000 as of 1:05 p.m. in Hong Kong. Bitcoin is now some $10,000 below February’s record above $58,000, stoking the debate over whether the token’s investment base will widen or peter out as happened in the 2017 boom and bust. Overall risk appetite in markets took a knock after Federal Reserve Chair Jerome Powell refrained from pushing back against the recent climb in long-term borrowing costs.

4. Chinese Tech Index Drops 21% in Two Weeks on Yield Concerns

The Hang Seng Tech Index, which includes Chinese technology giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd., closed down 2.1% Friday. The gauge has steadily declined since its Feb. 17 peak, compared to a drop of 9% in the Nasdaq 100 and a decline of around 7.5% in the MSCI Asia Pacific Information Technology Index over that time. The latest bout of selling followed a fresh spike in Treasury yields overnight. The technology sector is particularly sensitive to concerns that highly valued stocks may struggle to match expectations if borrowing costs surge, as Covid lockdowns end and economic growth fuels cyclical shares.

5. ECB May Increase Bond-Buying to Control Yield Rates

The European Central Bank will step up its pace of emergency asset purchases to counter rising bond yields that risk hurting growth prospects in the euro area, according to economists, who expect the 1.85 trillion-euro ($2.23 trillion) program to be extended beyond its current end-date of March 2022. At the same time, others expect another increase in the size of the tool, suggesting market moves so far haven’t fundamentally changed the economic outlook. Multiple policymakers have dismissed the need for drastic action after returns on government debt started to increase last week, yet they’ve also stressed that the ECB is ready to counter any “unwarranted” gains. For now, there’s no evidence that the region’s central banks have accelerated purchases. The Governing Council holds its next meeting on March 11.

6. China’s Humble Growth Target Signals Policy Shift From World

China’s government set a conservative economic growth target for this year, shifting its focus from recovery mode to longer-term challenges like reining in debt and reducing technological dependence on the U.S. The growth target was set at above 6%, well below economists forecasts, with the budget deficit expected to fall to 3.2% of gross domestic product, Premier Li Keqiang said Friday at the opening of the National People’s Congress. In sharp contrast to places like the U.S., where the Biden administration is trying to push through a new $1.9 trillion stimulus package, Beijing outlined a plan to normalize policy now that the pandemic is under control domestically and the economy has bounced back.

7. U.S., U.K. Consider Russia Sanctions, Possibly Targeting Debt

The U.S. and U.K. are weighing additional penalties against Russia over the use of chemical weapons, with options ranging from sanctions against oligarchs to the extreme step of targeting the nation’s sovereign debt. British officials plan to push for the Organisation for the Prohibition of Chemical Weapons to continue to pressure Russia to provide answers over its use of banned substances and will raise potential measures with key European allies, including France and Germany, in the coming weeks. The Biden administration announced its first sanctions against Russia on Tuesday, punishing the Kremlin for the poisoning and jailing of opposition leader Alexey Navalny. The penalties mirrored those imposed by the European Union and the U.K., mainly targeting senior Russian law enforcement officials and others allied with President Vladimir Putin.

8. U.S. Senate Readies $1.9 Trillion Stimulus for Legislation

Senate Democrats on Thursday released an updated version of the $1.9 trillion stimulus plan that Majority Leader Chuck Schumer said will pass the chamber by the end of the week. The legislation has already undergone several changes since President Joe Biden released his initial proposal in January — a $15 federal minimum-wage mandate has been stripped from the bill and the eligibility rules for the $1,400 stimulus payments have been narrowed. The latest version of the bill adds a full subsidy for the health insurance premiums of laid-off workers through September. The legislation, which Democrats hope can be signed into law next week, would rival the $2 trillion March 2020 Cares Act in size and scope and follow a $900 billion December relief package. 

9. China Pledges to Tackle Housing Problem in Biggest Cities

China pledged to solve the housing problem in large cities at its top legislative session, as monetary loosening after the pandemic spurred a rush to real estate in the biggest hubs, pushing home affordability there to the worst ever. “We will address prominent housing issues in large cities,” Premier Li Keqiang told the National People’s Congress in Beijing on Friday. “We will make every effort to address the housing difficulties faced by our people, especially new urban residents and young people.” Li repeated President Xi Jinping’s mantra that houses are “for living in, not for speculation” in the key report, signalling that policymakers may maintain a tight rein on the bubble-prone sector. “We will keep the prices of land and housing as well as market expectations stable,” he said.

10. China Deals Fresh Blow to Tech Giants in Reach for Data

Companies are encouraged to open up data related to areas from search to e-commerce and social media, in order to promote the healthy development of the sharing and online economies, according to a government report outlining the Communist Party’s top priorities for the next five years. Beijing is also establishing a platform for sharing public and government data. Industry behemoths Alibaba and Tencent as well as up-and-coming competitors like ByteDance and Meituan have at their disposal vast amounts of proprietary information, gathered from the hundreds of millions of consumers shopping on their platforms and using social media apps like WeChat and Douyin. Surrendering that data could undermine their market-leading positions and deal a heavy blow to their ability to squeeze out smaller competitors.

Curated from Bloomberg.com