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The New York Stock Exchange (NYSE) is reflected in a door in New York, U.S., on Friday, Feb. 9, 2018. The convulsions rocking U.S. equity markets continued Friday, with major indexes headed for the worst week in almost seven years after falling back from early gains. Treasury declines eased as investors sought havens from gold to the yen.

(bloomberg)

(Bloomberg) -- European shares fluctuated following a late downswing in Asia, and haven assets rallied, as last week’s surge in volatility continued to hang over markets. The dollar weakened against most major currencies.

S&P 500 futures pointed to a retreat in U.S. stocks at the market open after two days of gains. The yen headed for the strongest close since Nov. 2016 and the Swiss franc gained with gold. Bonds climbed, with the 10-year Treasury yield falling back after touching 2.89 percent on Monday. Metals found support from the weaker dollar. The pound advanced as data showed U.K. inflation held at 3 percent in January.

A jump in global equities yesterday wasn’t enough to put traders’ minds at ease that the volatility that wiped $2 trillion from U.S. stocks last week has come to an end. Consumer-price data due Wednesday could give some clues on where markets are heading, given that pressure on equities has been emanating from the outlook for inflation.

Hedge funds and other large speculators have boosted bets on Treasury futures to a record, indicating they expect the 2018 bond-market rout will resume in the days ahead. An investor at Goldman Sachs Asset Management warned Treasury 10-year yields could rise to as high as 3.5 percent in the next six months as the market prices in a steeper pace of Federal Reserve tightening.

Elsewhere, South Africa’s rand fluctuated as President Jacob Zuma refused to obey his ruling African National Congress’s order for him to resign voluntarily.

Terminal users can read more in our markets blog.

Here are some important things to watch out for this week:

  • Lunar new year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia. Chinese mainland markets are closed Feb. 15-21. India is out Tuesday for a public holiday.
  • The U.S. consumer-price index probably increased at a moderate pace in January, economists project. Retail sales in the U.S., also out Wednesday, probably increased for a fifth straight month.
  • Japan is expected to extend the longest stretch of economic growth since the mid-1990s when it reports fourth-quarter gross domestic product on Wednesday.
  • Earnings season continues in full swing with reports from Bunge, TripAdvisor, SunPower, Con Edison, Bombardier, MetLife, Cisco, Japan Post Bank, Credit Suisse, Nestle, Airbus, Allianz, Telstra and Coca-Cola.

These are the main moves in markets:

Stocks

  • The Stoxx Europe 600 Index fell 0.1 percent as of 8:16 a.m. New York time.
  • The MSCI All-Country World Index climbed 0.2 percent.
  • Futures on the S&P 500 Index dipped 0.3 percent.
  • The U.K.’s FTSE 100 Index gained less than 0.05 percent.

Currencies

  • The Bloomberg Dollar Spot Index sank 0.3 percent to the lowest in more than a week on the largest decrease in more than a week.
  • The euro climbed 0.3 percent to $1.2331, the strongest in a week.
  • The Japanese yen gained 0.9 percent to 107.71 per dollar, the strongest in 15 months on the largest rise in more than a week.
  • South Africa’s rand dipped 0.4 percent to 11.982 per dollar.
  • The British pound climbed 0.2 percent to $1.387, the largest climb in more than a week.

Bonds

  • The yield on 10-year Treasuries fell two basis points to 2.84 percent, the largest drop in more than a week.
  • Germany’s 10-year yield fell two basis points to 0.74 percent, the lowest in a week on the biggest fall in a week.
  • Britain’s 10-year yield declined two basis points to 1.576 percent.

Commodities

  • West Texas Intermediate crude fell 0.7 percent to $58.87 a barrel.
  • Gold rose 0.3 percent to $1,326.51 an ounce.
  • LME copper gained 1.6 percent to $6,937.50 per metric ton.

(An earlier version of this story corrected the size and scope in some bullet points.)

--With assistance from Andreea Papuc Adam Haigh and Aleksandra Gjorgievska

To contact the reporter on this story: Eddie van der Walt in London at evanderwalt@bloomberg.net.

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Natasha Doff

©2018 Bloomberg L.P.

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