Futures rise, reversing Monday declines
Markets set to rebound at the open tracking European markets higher.
U.S. equity futures rose in early premarket trade despite some worrisome global economic data released overnight. The eurozone unemployment rate rose to a record 12% in March, inline with estimates, except in Spain and Italy where the increase in unemployment was less than expected.
In other news, the eurozone manufacturing PMI rose to 46.8 in March from 46.6 in February, beating expectations of a reading of 46.6. Notably, Germany's manufacturing sector swung to a contraction in March from previous expansionary levels, and the Italian and Spanish PMIs were extremely weak.
The Reserve Bank of Australia left rates unchanged overnight, noting that inflation was running near trend despite growth running slightly below trend. The RBA Board noted that the current policy stance left open the chance of further easing but only if demand weakened further.
Bank of Japan Governor Kuroda spoke overnight, saying that the BoJ is looking at buying longer dated government bonds as part of its efforts. However, he noted that reflation efforts will take time as wage gains tend to lag broad price inflation.
S&P 500 futures rose 4.7 points to 1,560.80.
The EUR/USD was lower at 1.2838.
Spanish 10-year government bond yields fell to 5.04% from 5.06%.
Italian 10-year government bond yields fell to 4.71% from 4.76%.
Gold declined 0.14% to $1,599.20 per ounce.
Asian shares were mixed overnight as Japanese shares declined sharply for the second consecutive day on weak economic data and fears that easing efforts are failing. The Japanese Nikkei Index fell 1.08% and the Shanghai Composite Index declined 0.3% while the Hang Seng Index gained 0.31%. Also, the Korean Kospi fell 0.49% and Australian shares rose 0.38%.
European shares were mostly higher overnight despite unemployment across the eurozone hitting a new record high as manufacturing PMIs were slightly better than expected in most countries. The Spanish Ibex Index was flat in early trade while the Italian FTSE MIB Index fell 0.43%. Meanwhile, the German DAX gained 0.69% and the French CAC rose 0.65% and U.K. shares rose 0.9%.
Commodities were mixed overnight as oil gained and gold declined. WTI crude futures rose 0.01% to $97.06 per barrel and Brent crude futures gained 0.24% to $111.31 per barrel. Copper futures rose slightly overnight on not as dovish comments from the RBA Board as the previous statement. Gold was lower and silver futures rose 0.06% to $27.96 per ounce.
Currency markets were rather quiet overnight as major pairs were relatively unchanged as the Australian dollar was the notable out-performer. The EUR/USD was lower at 1.2838 and the dollar fell against the yen to 93.27. Overall, the Dollar Index rose 0.03% on strength against the pound and the euro despite weakness against the yen and the Canadian dollar. The Australian dollar was stronger overnight, gaining 0.34% against the greenback and 0.37% against the yen.
Stocks moving in the premarket included:
Humana (HUM) shares rose 11.64% premarket as insurers won a 3.3% rate increase in Medicare Advantage payments.
Hewlett-Packard (HPQ) shares declined 4.29% premarket on fears that a new push into the server space is too late.
Bank of America (BAC) shares rose 0.41% premarket as the company is set to continue to benefit from foreign tax credits as it restructures its international operations.
Dell (DELL) shares rose 0.14% premarket, continuing recent gains, as Michael Dell supported a competing bid from the Blackstone Group (BX) and warned on the risk of the company remaining public during its restructuring.
Notable companies expected to report earnings Tuesday include:
Global Payments (GPN) is expected to report third quarter earnings per share of $0.89 vs. $0.83 a year ago.
McCormick & Company (MKC) is expected to report first quarter EPS of $0.56 vs. $0.55 a year ago.
On the economics calendar Tuesday, motor vehicle sales will be released throughout the day following the Redbook and chain store sales. Also, factory orders are expected to be released and Fed Presidents Naryana Kocherlakota and Charles Evans are set to speak. In addition, the Treasury is set to auction four- and 52-week bills. Overnight, the British construction PMI is expected to be released and could move markets.
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