U.S. dollar edges up amid focus on jobs report, China

U.S. futures slipped as bond yields rose on inflation risks and uncertainty about the path of American rate policy, stifling potential gains from China’s move to ease COVID restrictions.

Contracts on the S&P 500 retreated 0.4 per cent while those on the Nasdaq 100 were down 0.3 per cent. Treasury yields climbed, lifting the dollar into positive territory. The two-year rate most sensitive to policy rose to the highest this month.

A hotter-than-expected U.S. jobs report last week along with a jump in average hourly earnings point to fresh inflation risks and more bond volatility. While dovish Fedspeak may be keeping yields anchored, they have some way to go to before they close the gap with terminal rate expectations.