(Bloomberg) — Bonds extended their drop as traders braced for a swathe of US data that could show whether bets on interest-rate cuts this year are justified.

Most Read from Bloomberg

Government debt fell across Europe and US Treasury yields rose, leaving the rate on the 10-year bond up five basis points at 3.98%. The Stoxx 600 benchmark and futures contracts on US shares edged lower. The dollar was flat against its Group-of-10 peers after notching its biggest daily gain since March.

Tuesday’s combined slump for bonds and stocks globally was the biggest for a first full trading day since at least 1999 as traders tempered their enthusiasm on Federal Reserve easing. The question now is whether that was a one-off rout, and the latest Fed minutes, manufacturing and job openings data due Wednesday may offer clues.

“2024 has kicked off with risk retrenchment,” Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank Ltd., said in a note. “Whether this is a durable purge from excessive exuberance or merely pre-NFP profit-taking is unclear,” he said, referring to the US nonfarm payrolls data at the end of the week.

In Asia, China tech stocks are in focus after a report that Beijing removed a top official who oversaw the nation’s gaming industry. That may mean the government is trying to cool a backlash against harsh new regulations that triggered an $80 billion rout across the sector. Tencent Holdings Ltd. and smaller rival NetEase Inc. reversed earlier losses.

Elsewhere, Bitcoin traded stronger for a fifth day, hovering around $45,000, as investors anticipate the US will approve an exchange-traded fund investing directly in the biggest token.

Story continues

Oil held losses after the risk-off tone in markets undercut concern about an escalating conflict in the Red Sea.

Key events this week:

• Germany unemployment, Wednesday

• US FOMC minutes, ISM Manufacturing, job openings, light vehicle sales, Wednesday

• Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Wednesday

• China Caixin services PMI, Thursday

• Eurozone S&P Global Eurozone Services PMI, Thursday

• US initial jobless claims, ADP employment, Thursday

• Eurozone CPI, PPI, Friday

• US nonfarm payrolls/unemployment, factory orders, ISM services index, Friday

• Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.1% as of 9:05 a.m. London time

• S&P 500 futures fell 0.1%

• Nasdaq 100 futures fell 0.3%

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index fell 1%

• The MSCI Emerging Markets Index fell 1.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.1% to $1.0956

• The Japanese yen fell 0.4% to 142.60 per dollar

• The offshore yuan was little changed at 7.1516 per dollar

• The British pound rose 0.2% to $1.2646

Cryptocurrencies

• Bitcoin rose 0.3% to $45,260.83

• Ether rose 0.3% to $2,374.01

Bonds

• The yield on 10-year Treasuries advanced five basis points to 3.98%

• Germany’s 10-year yield advanced three basis points to 2.10%

• Britain’s 10-year yield advanced four basis points to 3.68%

Commodities

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Joanna Ossinger, Tassia Sipahutar and Pearl Liu.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.