? Italian bonds, shares sink.
? Dollar strengthens against yen, euro and sterling.
? China denies it proposed reducing trade surplus with U.S.
? Brent rises over supply crunch fears.
? European stocks fall after strong gains in Asia.
Italian bonds sold off and German Bunds rose as Italian populist parties agreed policies for a coalition government. The dollar strengthened and benchmark 10-year Treasury yields fell after China denied that it had proposed narrowing its trade surplus with the U.S. by up to $200 billion a year. European stocks were down, and futures pointed to the S&P 500 opening 0.24% higher.
The yield on Italy's 10-year government bonds climbed more than 8 basis points to 2.201% as of 6:58 a.m. ET, after the anti-establishment Five Star Movement and far-right League agreed on slashing taxes and providing a basic income. Earlier proposals for a referendum on membership of the euro and for the ECB to cancel Italian debt were not included. The euro reversed gains to fall 0.1% to $1.1784. The yield on safe haven Bunds eased by less than 1 basis point to 0.633%.
The FTSE MIB shed 1.02% in Milan around 7 a.m. ET. UniCredit SpA shares slid 1.92%, and Intesa Sanpaolo SpA's stock was down 1.79%.
The dollar firmed 0.24% against the yen and 0.3% against sterling as China denied reports it had offered to reduce its trade surplus with the U.S. Separately, China's commerce ministry said it would end an antidumping probe on U.S. sorghum imports. Ten-year Treasury yields dropped by less than 1 basis point to 3.110% around 6:56 a.m. ET.
Brent crude oil rose 0.35% to $79.58 per barrel on the ICE Futures Exchange around 7 a.m. ET amid concerns over falling Venezuelan production and U.S. sanctions on Iran.
The Indonesian rupiah fell 0.70% against the dollar after the country's central bank raised rates for the first time since November 2014 to support the currency. The Turkish lira was down 0.25% and the Mexican peso slipped 0.22% against the dollar as higher U.S. yields prompt sales of emerging-market assets.
The Euro Stoxx 50 fell 0.14% and the FTSE 100 was down 0.11%. Shanghai stocks jumped 1.24% and Hong Kong's Hang Seng Index added 0.34% as rising oil prices buoyed the energy sector. Shares of Chinese national oil and gas companies CNOOC Ltd. and PetroChina Co. Ltd. surged 3.43% and 6.37%, respectively, in Hong Kong.
Gold lost 0.24% to 1,286.30 per ounce around 7:00 a.m. ET.
The Canadian dollar slipped 0.11% against the U.S. dollar ahead of consumer price inflation and retail sales data. A rebound in retail sales for March, following strong manufacturing sales reported earlier this week, "would give policymakers some comfort and should be modestly supportive of [the Canadian dollar]," according to ING Research.
Upcoming speakers from the U.S. Federal Reserve were expected to reiterate the message of a gradual policy tightening ahead, which will have a limited reaction in the markets as two to three rate hikes are already priced in for 2018, ING Research said.
More from S&P Global Market Intelligence:
What State Bank’s sale says about the credit cycle
House panel clears 32 bills to address US opioid crisis
US to scrutinize Thailand's benefits under trade preference program
US House leader: NAFTA vote possible in December if review moves quickly
FERC to breathe new life into PURPA review effort
Total CEO sees geopolitics driving oil prices to $100/bbl in next few months
Smaller Chinese life insurers to see continued pressure on solvency
As Ebola cases mount, world health officials convene emergency meeting
Analysts project bright prospects for Sun Hung Kai's HK$25B land acquisition
The day ahead:
8:30 a.m. ET — Canada CPI (Econoday consensus: 0.3% monthly, 1.8% yearly)
8:30 a.m. ET — Canada retail sales (Econoday consensus: 0.2% monthly)
9:15 a.m. ET — U.S. Fed's Robert Kaplan speaks
9:15 a.m. ET — U.S. Fed's Lael Brainard speaks
1 p.m. ET — U.S. Baker-Hughes rig count