Monday June 6th

6-06-2016

Futures higher as Street awaits Yellen

U.S. stock-index futures pointed to a higher open Monday, amid gains in oil prices, as traders awaited Fed Chair Janet Yellen's speech scheduled for midday. Investors will scrutinize her comments for insight on the timing of the next rate hike. Earlier, Boston Fed President Eric Rosengren said the U.S. economy's recent recovery has moved the Fed closer to raising rates, although May's "disappointing" employment report might delay the timing of the next hike. U.S. stocks closed lower Friday, with financials lagging, after the latest jobs report showed creation of just 38,000 jobs. That was well below the expected 162,000 and cast doubt on the economic recovery. Dow futures were up more than 50 points Monday morning, while S&P 500 futures were up 5 points. The U.S. dollar index was steady after posting its worst day since early December on Friday. The euro was near $1.136 and the yen was around 107.1 yen against the greenback as of 8:32 a.m. ET. Treasury yields were higher, with the 2-year yield around 0.79 percent and the 10-year yield near 1.72 percent. European stocks were mixed on Monday following a cautious lead from Asia and a shaky start to the trading session. The pan-European Stoxx 600 index was trading 0.2 percent higher Monday after opening 0.3 percent lower. The European trade followed a mixed trading day in Asia with Japan shares losing ground, as the disappointing May jobs weakened the dollar and bolstered regional currencies, including the yen. The Nikkei 225 closed down 62.20 points, or 0.37 percent, at 16,580.03, retracing some of its early losses of as much as 1.81 percent and the yen walked back some of its initial surge. In Australia, the ASX 200 ended up 41.51 points, or 0.78 percent, at 5,360.40, led by a 3.8 percent advance in the materials sub-index and an 11.85 percent gain in the gold sub-index. Chinese mainland markets ended mixed, with the Shanghai composite down 4.39 points, or 0.15 percent, at 2,934.28, while the Shenzhen composite closed up 5.31 points, or 0.27 percent, at 1,920.12. In Hong Kong, the Hang Seng index was up 0.14 percent as of 3:12 p.m. HK/SIN. The South Korean stock market is closed for memorial day. Oil prices spiked on Monday after Exxon Mobil reported a pipeline failure and spill at its Torrance refinery near Los Angeles, Dow Jones reported. Crude futures had already risen on Monday, lifted by a plunge in the dollar that could spur demand just as attacks on Nigerian oil infrastructure tighten supplies. Brent crude futures were up 95 cents, or 1.9 percent, at $50.59 a barrel at 8:46 a.m. ET (1246 GMT). U.S. crude futures were up $1.03, or 2.1 percent, at $49.65 a barrel. Gold pared early gains on Monday, having touched a two-week high that built on Friday's biggest one-day gain in nearly four months after surprisingly weak U.S. jobs data cut the chance of a June rise in U.S. interest rates. Bullion, which has gained about 17 percent this year, had been under pressure in recent weeks as comments from senior U.S. central bank officials, including Fed chief Janet Yellen, boosted expectations of an imminent interest rate rise. Higher interest rates increase the opportunity cost of holding non-yielding gold while bolstering the dollar. Spot gold rose to its highest since May 24 at $1,248.40 an ounce, before easing and up just 0.04 percent at $1,244.66. Data on Friday showed that the U.S. economy created the fewest number of jobs in more than 5-1/2 years in May.