? Dollar slips, 10-year Treasury yields ease.
? European equities down despite Asian gains.
? S&P set to open higher.
? ECB's Draghi to speak.
The dollar's momentum stalled and U.S. yields eased following softer-than-expected inflation data. European stock markets retreated, though Italian stocks rose even as prospects grew for a euroskeptic government. Futures pointed to the S&P 500 opening 0.24% higher, after strong overnight gains in Hong Kong and Japan.
Yields on 10-year Treasurys eased less than 1 basis point to 2.957% around 7:09 a.m. ET, as monthly measures of both U.S. core and headline inflation fell short of expectations. The dollar weakened 0.18% and 0.13% against the euro and the yen, respectively.
"This likely marks the beginning of a new phase, with the dollar moving lower," according to Brown Brothers Harriman. "Investors have learned over the past two weeks that neither wages nor consumer prices are accelerating. Technical indicators have become stretched for the dollar, and we [are] on the lookout for signs of a near-term correction."
Sterling gained 0.45% against the dollar around 7:10 a.m. ET.
The pace of the dollar rebound appeared "excessive," Société Générale said in a research note.
The Mexican peso, one of the best-performing currencies May 10, edged up 0.06% as U.S. House Speaker Paul Ryan set a May 17 deadline for a notification of intent to sign a new North American Free Trade Agreement.
"The U.S. data calendar does not look especially threatening to dollar bears next week and instead we'll be looking to see whether [emerging-market] high yield can hold onto its gains," ING Research wrote. "Clearly [emerging-market] investors are hoping (and praying) that the dollar rally is nearly over."
However, Oliver Jones of Capital Economics said further weakness for emerging-market assets is on the cards until the end of 2019, as rising risk aversion and Treasury yields continue to bite.
The Turkish lira was down nearly 0.9% against the dollar, and the Philippine peso fell 0.7% after the country's central bank raised its interest rate for the first time since September 2014 in a bid to dampen inflationary pressures.
Brent crude was down 0.09% to $77.40 per barrel on the ICE Futures Exchange, while gold rose 0.2% to $1,325.0 an ounce.
The Euro Stoxx 50 fell 0.25% and the FTSE 100 edged 0.06% lower. Overnight, the Shanghai Composite dropped 0.35%, but Hong Kong's Hang Seng index and Japan's Nikkei 225 were each up more than 1%.
Italian 10-year yields retreated nearly 4 basis points as negotiations to create a populist coalition government are expected to stretch over the weekend, with a potential decision expected by May 13. The chances of a coalition have increased since former Prime Minister Silvio Berlusconi said he would not veto such a proposition but the parties' "political and fiscal room for maneuver is set to be limited," according to Société Générale. The FTSE MIB rose 0.37% in Milan.
European Central Bank President Mario Draghi is scheduled to speak at the EU State of the Union conference in Florence, Italy. Investors will look for hints that the first-quarter economic slowdown in the eurozone was led by temporary factors, and that the ECB's exit strategy is on course, ING Research said.
Sika AG's shares surged 8.66% as it struck a deal which prompted Compagnie de Saint-Gobain AG to drop its takeover bid for the specialty chemicals company, ending a drawn-out legal dispute.
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The day ahead:
8:30 a.m. ET — Canada labor force (Econoday consensus: 16,000 employment)
8:30 a.m. ET — U.S. Federal Reserve's James Bullard speaks
8:30 a.m. ET — U.S. import and export prices
10 a.m. ET — U.S. consumer sentiment (Econoday consensus: 99.0)
1 p.m. ET — U.S. Baker-Hughes rig count