? Italian bonds fall.
? 10-year Treasury yields dip below 3.1%.
? Futures point to lower Wall Street open.
? Brent closes in on $80 per barrel.
Yields on benchmark 10-year U.S. Treasury bonds dipped below 3.1% and the dollar rose against the euro and the yen as futures pointed to a lower opening on Wall Street. Brent crude nudged $80 a barrel. Italian bond yields rose again as a populist-far right coalition deal neared completion.
The 10-year Treasury yield fell less than 1 basis point to 3.095% by 7:06 a.m. ET. The yield on safe-haven German Bunds eased down a similar amount to 0.602% as Italy's yield bumped 6 basis points higher to 2.18%. The Italian yield has jumped more than 40 basis points in two weeks. But the probability a government run by the populist Five Star Movement and the far right League would actually enact radical proposals including the cancellation of €250 billion in public debt, is quite low, according to Paul Donovan of UBS Research.
The euro slid 0.2% to $1.1786.The dollar rose 0.18% against the yen amid reports that Japan is considering duties on about $409 million U.S. exports as retaliation against steel and aluminum tariffs. Sterling was little changed at $1.3487 following news that the U.K. was considering remained tied to the EU customs union after 2021, in a bid to avoid a hard border in Ireland.
The Turkish lira depreciated 0.6% against the dollar, but remained above record lows after the country's central bank said it would take "necessary steps" to ensure market stability. Indonesia's central bank raised its seven-day repo rate by 25 basis points, its first increase since 2014, after pressure on the rupiah,
Brent crude rose 0.79% to $79.91 a barrel on the ICE Futures Exchange after data showed an unexpected drop in U.S. oil supplies on May 16.
The Euro Stoxx 50 rose 0.19% and the FTSE 100 added 0.15%. The Shanghai SE Composite fell 0.48% as China and U.S. enter a second round of critical trade negotiations in Washington. The Hang Seng Index closed 0.54% lower. The Hong Kong Monetary Authority bought approximately HK$16 billion to support the currency after it slipped to 7.8498 against the U.S. dollar.
Futures pointed to the S&P 500 Index opening 0.16% lower.
Gold dropped 0.37% to $1,286.70 per ounce. The metal remains under pressure from rising bond yields and an appreciating dollar, said Fawad Razaqzada, a market analyst at Forex.com.
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The day ahead:
8:30 a.m. ET — U.S. jobless claims (Econoday consensus: 215,000)
8:30 a.m. ET — Philadelphia Fed business outlook survey (Econoday consensus: 21.0)
9:45 a.m. ET — U.S. Bloomberg consumer comfort index
10 a.m. ET — U.S. e-commerce retail sales
10 a.m. ET — U.S. leading indicators (Econoday consensus: 0.4%)
10:30 a.m. ET — U.S. EIA natural gas report
10:45 a.m. ET — U.S. Fed's Neel Kashkari speaks
1:30 p.m. ET — U.S. Fed's Robert Kaplan speaks
4:30 p.m. ET — U.S. Fed balance sheet
4:30 p.m. ET — U.S. money supply
7:30 p.m. ET — Japan CPI
