U.S. stock futures rose after a Wall Street selloff on Friday after major banks reported disappointing results. Both S&P 500 and Nasdaq futures increased 0.4%.
China's securities regulator announced draft guidelines on Friday to improve firm listing, delisting, and computer-driven program trading supervision, sending equities up.
Market players saw it as a gesture to enhance China's stock market and protect investors. The blue-chip CSI300 index (.CSI300) surged nearly 2%, while the Shanghai Composite index (.SSEC) increased 1.2%.
As traders reduced their expectations of Federal Reserve rate reduction this year, U.S. Treasury rates maintained near their recent highs. At 4.9269%, the two-year yield was around 5%, while the 10-year yield was 4.5605%.
A run of solid U.S. economic statistics, including last week's hotter-than-expected inflation report, suggests that rates may stay higher and that a Fed lowering cycle is unlikely to begin in June.
“We have modified our predictions for the U.S. FOMC, pushing off the start of the interest rate reducing cycle to September 2024, from July before," stated Commonwealth Bank of Australia senior economist Kristina Clifton.
The first quarter of 2024 saw a better U.S. CPI than projected. We expect a streak of 0.2%/month inflation prints to convince the Fed that inflation can stay low and that interest rates do not need to be restrictive."
This week, several Fed members will talk, including Chair Jerome Powell, who may shed light on U.S. interest rates. After bitcoin set new milestones this year thanks to flows into new spot bitcoin exchange-traded funds and predictions of Fed reduction, rate expectations changed, halting its surge.
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