By Andreea Papuc June 1, 2021, 5:21 AM GMT+8 Updated on 

  •  Cyclicals lead Stoxx 600 higher as data points to recovery
  •  Oil climbs on forecast of tighter market; Treasury yields rise

U.S. equity futures rose with stocks, and commodities including oil jumped, as a string of positive economic readings helped spur optimism in the recovery from the pandemic.

S&P 500 and Nasdaq 100 contracts climbed ahead of manufacturing data for May that is expected to show a continuing rebound from Covid lows. That would add to a raft of strong readings from Europe and Asia that boosted shares there. Euro-area factories are struggling to keep up with surging demand, while manufacturing grew in Asia in May despite Covid-19 flareups.

The recovery is helping to push prices for raw materials higher, as a bullish forecast from the OPEC+ alliance sent WTI crude futures to their highest in more than two years. Commodities from iron ore to copper climbed. Treasuries slipped and the dollar was steady.

Global stocks are starting the new month near record highs, underpinned by the recovery from the health crisis and ample liquidity. Still, the jump in commodities prices is stoking concerns that rising inflation could prompt central banks to withdraw support earlier than anticipated. In addition to the manufacturing figures, traders are awaiting key American jobs data later in the week to help assess the path of the rebound.

“The inflation outlook is a risk because it is so unknown at the moment, and it will take a number of months to really get a true idea of whether we will see that inflation be persistently higher or not,” Kerry Craig, JPMorgan Asset Management global market strategist, said on Bloomberg TV.

Here are key events to watch this week:

  • OPEC+ meets to review oil production levels Tuesday
  • Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan speak Wednesday
  • U.S. employment report for May on Friday

These are some of the main moves in markets:

Stocks

  • Futures on the S&P 500 Index advanced 0.5% as of 8:27 a.m. New York time.
  • The Stoxx Europe 600 Index climbed 1.3%.
  • The MSCI Asia Pacific Index climbed 0.3%.
  • The MSCI Emerging Market Index gained 0.7%.

Currencies

  • The Bloomberg Dollar Spot Index was little changed.
  • The euro was little changed at $1.2222.
  • The British pound decreased 0.3% to $1.4166.
  • The onshore yuan weakened 0.2% to 6.384 per dollar.
  • The Japanese yen weakened 0.1% to 109.66 per dollar.

Bonds

  • The yield on 10-year Treasuries jumped three basis points to 1.62%.
  • The yield on two-year Treasuries increased one basis point to 0.15%.
  • Germany’s 10-year yield gained one basis point to -0.18%.
  • Britain’s 10-year yield advanced two basis points to 0.817%.
  • Japan’s 10-year yield decreased less than one basis point to 0.083%.

Commodities

  • West Texas Intermediate crude advanced 3.4% to $68.58 a barrel.
  • Brent crude advanced 2.6% to $71.09 a barrel.
  • Gold strengthened 0.2% to $1,910.47 an ounce.

— With assistance by Nancy Moran