LIVE MARKETS Technical issues – Reuters

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TECHNICAL PROBLEM (0754 GMT)

Nasdaq futures were down nearly 1% on Tuesday, making it likely the tech-heavy index will add to its year-to-date losses of around 4.5%. After rising for 12 of the past 13 years, it is under heavy pressure from the prospect of higher interest rates and bond yields, more so than the broader S&P 500 index or global equity benchmark. from MSCI.

The 4.5% loss masks deeper falls – 29 stocks have already lost 10% or more this year, according to Capital Economics.

The positioning of Nasdaq futures has changed dramatically, Citi analysts point out, noting that $2 billion of remaining long positions are deep in the red.

Those investors will look nervously to bond markets, where two-year US Treasury borrowing costs topped 1% for the first time since February 2020. In Europe, German 10-year yields are poised to soar. above 0% for the first time. times since mid-2019.

Inflation is front and center as crude oil prices hit seven-year prices. This is good news for some – the Bank of Japan earlier signaled that the country is finally emerging from deflation in a sustainable way – but the bond sell-off is setting the stage for a dismal trading session; most Asian markets fell and Europe looks set to open weaker.

All eyes are now on central banks. The US Federal Reserve is now more or less poised to start raising interest rates from March, Canada could act as early as next week, while UK labor data, which topped Tuesday’s forecast , make it virtually certain that the Bank of England’s Feb. 2 meeting will yield a hike.

Key developments that should further guide markets on Tuesday:

-BOJ raises price outlook but maintains ultra-simple policy read more

– UK employers add record number of jobs read more

-Brent surges to over 7 on Middle East tensions, tight supply

-Meeting of EU finance ministers on minimum corporate tax, recovery fund and EU budget

-ECB Vice-President Luis de Guindos speaks

– The Governor of the Banque de France, François Villeroy de Galhau, takes the floor

-Riksbank Governor Stefan Ingves speaks

German -ZEW

-US profits: BNY Mellon, Goldman Sachs, Charles Schwab

(Sujata Rao)

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EUROPE IS ON THE POINT OF FALLING AS THE BUND TURNS TOWARDS ZERO (0745 GMT)

As bonds sell off and German 10-year yields near zero, equities struggle globally as traders bet the Fed could tighten policy more quickly to tame inflation.

So after the losses in Asia, European stocks are expected to follow with stock index futures down about 0.3%, while US futures pointed to heavy losses for tech stocks later.

Also in Europe, investors will be watching the tech space (.SX8P), a sector that has flourished thanks to extensive central bank stimulus that boosted valuations, and the COVID-19 pandemic.

Meanwhile, oil continues its rally with Brent now at a 7-year high, which could possibly help energy stocks further.

(Danilo Masoni)

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