Asian Stocks to Drift Near Record Highs; Oil Jumps: Markets Wrap

(Bloomberg) -- The global equity rally looks set to take a breather in Asia Tuesday as investors mull stimulus prospects and virus trends with stocks at record highs. Oil climbed to a near two-year high.

Futures pointed to a muted start in Japan and Hong Kong, and Australian shares edged up at the open. S&P 500 futures were little changed after U.S. stocks rose for the sixth straight session. The benchmark closed at an all-time high spurred by fresh signs the Biden administration is committed to passing a sizable aid bill to address unemployment. An increase in vaccination numbers boosted optimism that the economy will take off later this year. Treasuries were steady and the dollar retreated.

Commodities prices pointed to renewed optimism in the global economic recovery. Brent oil advanced above $60 a barrel for the first time in more than a year, while copper climbed for a second day and iron ore prices rebounded. Bitcoin jumped to a record after Tesla Inc. bought $1.5 billion of the cryptocurrency.

Investors are taking comfort from vaccine rollouts and signs of progress on stimulus, though worries remain about stretched valuations. With inflation expectations near the highest since 2013, questions have also begun to be raised about when the so-called reflation trade in bonds could start to threaten equities.

“The vaccine roll-out programs certainly suggest that the reflation trade has legs but central banks seem to want to ensure that expectations are kept in check,” Jane Foley, head of foreign exchange strategy at Rabobank, said on Bloomberg TV. “This suggests a choppy ride.”

Here are some key events coming up:

• Earnings season continues with companies including Honda Motor, Cisco Systems, Societe Generale and L’Oreal.
• EIA crude oil inventory report comes Wednesday.
• Sweden will set monetary policy on Wednesday.
• Federal Reserve Chair Jerome Powell will speak on a webinar Wednesday.
• The U.S. consumer price index comes Wednesday.
• Lunar New Year public holidays begin in nations across Asia, with China breaking for a week.
• Bank of Russia’s policy decision comes Friday.

These are the main moves in markets

Stocks

• S&P 500 futures were little changed as of 8:03 a.m. in Tokyo. The S&P 500 Index increased 0.7%.
• Nikkei 225 futures rose 0.3%.
• Australia’s S&P/ASX 200 Index rose 0.1%.
• Hong Kong’s Hang Seng Index futures rose 0.2% earlier.

Currencies

• The yen was at 105.23 per dollar.
• The offshore yuan was little changed at 6.4468 per dollar.
• The Bloomberg Dollar Spot Index fell 0.1%.
• The euro was at $1.2052.

Bonds

• The yield on 10-year Treasuries rose one basis point to 1.17%.
• Australia’s 10-year bond yield fell three basis points to 1.24%.

Commodities

• West Texas Intermediate crude rose 0.1% to $58.04 a barrel after jumping 2.2%.
• Brent crude gained 2.2% to $60.67 a barrel.
• Gold was at $1,830.76 an ounce.

©2021 Bloomberg L.P.