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? Italian bonds rally as political panic cools.
? 10-year U.S. Treasury yield rises ahead of employment, GDP data.
? Euro, sterling gain; yen dips against dollar.
? S&P 500 set to open higher.
Italy's bonds and stocks recovered as political leaders attempt to avoid snap elections in July. Benchmark U.S. Treasury yields gained ahead of U.S. employment and GDP data, while the dollar lost its footing against the euro and sterling. Most European stock markets rose and futures point to the S&P 500 opening 0.41% higher.
Ten-year Treasury yields climbed almost 8 basis points to 2.86% ahead of employment data and the latest first-quarter GDP figure for the U.S. "Both are expected to be supportive of a U.S. rate rise next month," said CMC Markets U.K.'s Michael Hewson.
The yen slipped 0.03% against the dollar, and sterling rose 0.17% against the dollar as of 6 a.m. ET.
The meltdown in Italian bonds paused, with 10-year yields dropping by more than 13 basis points to 3.029% amid local media reports, cited by Barclays analysts, that parties across the political spectrum are attempting to forge a last-minute deal to avoid snap elections in July. Prime Minister-Designate Carlo Cottarelli is expected to meet President Sergio Mattarella to discuss the interim government. The FTSE MIB was up in Milan.
Worries about new elections are still rife, however. "The concern is that this uncertainty will persist for some time to come given new elections are needed," Société Générale wrote. "Better economic data for the euro area would be welcome news but is unlikely to be enough to induce stability."
Ten-year yields on safe-haven German Bunds gained 8 basis points to 0.34%. The euro bounced back, rising 0.66% against the dollar, though the current euro pricing includes a "substantial" 4% political risk premium, according to ING.
Most European equity markets shrugged off Italian woes, with the FTSE 100 edging up 0.12% and Germany's DAX index adding 0.3%. The Euro Stoxx 50 slipped 0.19%.
Earlier in Asia, the Shanghai SE Composite lost 2.53%; the U.S. is poised to impose 25% tariffs on $50 billion of imports from China containing industrially significant technology. The U.S. is also reportedly planning to crack down on intellectual property theft by reducing the length of visas issued to some Chinese citizens. Hong Kong's Hang Seng index fell 1.37%, while Japan's Nikkei 225 closed 1.52% lower.
Brent crude oil rose 0.54% to $75.80 a barrel on the ICE Futures Exchange.
Gold slipped 0.11% to $1,302.7 per ounce.
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S&P removes Venezuela's local currency ratings from CreditWatch negative
Investors push ECB rate hike bets to October 2019 amid Italian turmoil
Railway strike in Canada would be bad for business, miners warn
US EPA proposes to retain current SO2 standard
Potential auto tariffs seen hitting Mazda and makers of car parts
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'World record' deal propels Berkshire into global reinsurance top 3
The day ahead:
8:00 a.m. ET — Germany CPI (Econoday consensus: 0.3% monthly, 1.9% yearly)
8:15 a.m. ET — U.S. ADP employment report (Econoday consensus: 187,000)
8:30 a.m. ET — U.S. GDP (Econoday consensus: 2.2% quarterly)
8:30 a.m. ET — U.S. international trade in goods (Econoday consensus: $71 billion deficit)
8:30 a.m. ET — Canada IPPI
8:30 a.m. ET — U.S. corporate profits
8:30 a.m. ET — U.S. retail inventories advance
8:30 a.m. ET — U.S. wholesale inventories advance (Econoday consensus: 0.3% monthly)
8:55 a.m. ET — U.S. Redbook
10:00 a.m. ET — Bank of Canada announcement (Econoday consensus: no change)
2:00 p.m. ET — U.S. Beige Book
3:00 p.m. ET — U.S. Fed to issue proposal to modify Volcker rule
3:00 p.m. ET — U.S. farm prices
7:50 p.m. ET — Japan industrial production (Econoday consensus: 1.3% monthly)
9:00 p.m. ET — China CFLP manufacturing PMI (Econoday consensus: 51.4)

