Premarket: Global stocks teeter toward worst month since September, yen swings

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Futures markets predicted strong tech earnings would spark a Wall Street relief rally later in the day and help traders recoup losses

Global stocks were teetering on Friday toward their worst month since September, although futures markets predicted strong tech earnings would spark a Wall Street relief rally later in the day that would help traders recoup some losses.

In a volatile session on Friday, the yen, weakened as far as 156.8 per dollar after the Bank of Japan kept interest rates around zero at its policy meeting that concluded Friday despite forecasting inflation of around 2% for three years. Japan intervened in the currency market three times in 2022, selling the dollar to buy yen, first in September and again in October as the yen hit 152 per dollar.The U.S. currency has strengthened against peers as traders now expect the Fed to lower its main funds rate, currently at a 23-year high of 5.25% to 5.5%, by just 36 basis points this year, with some fearing a further hike.

The two-year Treasury yield, which reflects short term interest rate expectations, hovered near 5% on Friday. The benchmark 10-year yield rose 2 bps to 4.71%, almost 50 bps higher since late March. Bond yields rise as prices of the debt instruments fall. The ECB is expected to cut its deposit rate from a record 4% in June but analysts have queried how far it can diverge from U.S. monetary policy without weakening the euro significantly.

 

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