(Reuters) - Big ebbs and flows in world stocks markets from day to day are starting to become metronomic – revealing relatively high implied volatility without a clear new direction.
Wall St indices lunged more than 2 percent again on Friday on a mix of trade war anxiety and fears of a loss of economic momentum after a below-forecast U.S. employment report for March.
But the S&P500 merely returned to Wednesday’s levels and closed above the closely-watched 200-day moving average line of long-term rising momentum. Volatility gauges nudged higher, with the Vix closing at 21.50 percent, and the latest equity wobble and jobs disappointment saw 10-year Treasury yields slip back below 2.80 percent.
However, despite continued sabre-rattling on trade over the weekend between Washington and Beijing, Asia’s major bourses and U.S. stock futures rallied again overnight as we head into the first quarter U.S. earnings season next week, where aggregate annual profit growth is expected to come in at a seven-year high close to 20 percent.
And despite the trade row, White House and Treasury officials continue to say negotiations with China are already underway to resolve tensions. Chinese President Xi Jinping is due to give a set-piece speech on the issue later. Also helping was news North Korea had told the United States for the first time that it was prepared to discuss denuclearization when their leaders meet.
Facebook CEO Mark Zuckerberg is also due to meet U.S. lawmakers later on Monday ahead of a congressional questioning tomorrow over a row about a major breach of personal data for U.S. political purposes.
S&P500 futures were up about 0.7 percent first thing, Shanghai closed marginally in the black and HK stocks were up more than 1 percent. Tokyo’s Nikkei225 was up 0.5 percent and Seoul’s Kospi was up 0.6 percent.
European stocks opened about half a percent higher. Shares in Deutsche Bank rose 4 percent at the open after chief executive John Cryan was replaced by retail banking specialist Christian Sewing on Sunday, with Sewing saying early Monday he would now review the structure of the giant German lender’s investment bank.
Currency markets were mostly stable, although Russia's rouble continued to weaken to two-month lows after losses on Friday when the U.S. another round of sanctions against Russian business people and entities.
Shares of Russian aluminium giant United Company Rusal plunged as much as 41.8 percent on Monday as investors bailed on the stock after it was included in a new list of U.S. sanctions targeting Russian companies and their owners. Brent crude oil prices were higher on Monday.
In Hungary, strongman Viktor Orban won a third a third straight term in power in Sunday elections after his anti-immigration campaign message secured a strong majority in parliament, based on preliminary results. He is expected to continue his economic policies of income tax cuts and incentives to boost growth. Hungarian stocks and the forint were firmer.
A look at the day ahead from EMEA markets editor Mike Dolan. The views expressed are his own.
Editing by Toby Chopra