U.S. equity futures rise; dollar extends rally

Markets are ending the week on a positive note, with U.S index futures and European equities rising after declines sparked by the Federal Reserve’s plan for aggressive monetary-policy tightening.

Markets are ending the week on a positive note, with U.S index futures and European equities rising after declines sparked by the Federal Reserve’s plan for aggressive monetary-policy tightening.

Contracts on the S&P 500 and Nasdaq 100 posted modest increases, signaling a firmer U.S. open on the last day of a down week for equities. The two-year Treasury yield rose four basis points and the 10-year yield climbed one basis point, reversing some of the curve steepening seen in the wake of the Fed minutes Wednesday, which outlined plans to pare the central bank’s balance sheet by more than US$1 trillion a year alongside interest-rate hikes.

A dollar gauge extended its rally to a seventh day, hovering near the highest level since July 2020. Oil was higher after three days of losses stoked by plans to release millions of barrels of crude from strategic reserves and China’s demand-sapping virus outbreak.

The Stoxx Europe 600 index climbed more than 1 per cent as investors took advantage of beaten-down stock valuations. Banks outperformed, with Banco BPM SpA surging after Credit Agricole SA bought a 9.2 per cent stake in the Italian lender.

Global equities are nursing losses for the week as markets grapple with the Fed’s campaign against elevated price pressures, Russia’s grinding war in Ukraine and China’s COVID travails. The lockdown in Shanghai -- which recorded more than 21,000 new daily virus cases -- has become one of President Xi Jinping’s biggest challenges. Expectations are growing that China will take steps to support its economy.