Asian Stocks Set to Advance; Crude Oil Jumps: Markets Wrap

Asian Stocks Set to Advance; Crude Oil Jumps: Markets Wrap
Adam Haigh

(Bloomberg) -- Asian stocks looked set for gains Monday amid signs that the pace of coronavirus outbreaks continues to slow. WTI crude oil breached $60 dollars a barrel as an arctic freeze grips parts of the U.S.

Futures pointed higher in Japan, and Australian shares rose. S&P 500 futures ticked higher. The kiwi dipped after New Zealand locked down Auckland while it investigates new Covid-19 cases. U.S. markets are shut for Presidents’ Day, while exchanges in China, Hong Kong and Taiwan are also closed on Monday. Bitcoin approached $50,000. Australian bonds slumped after Friday’s jump in Treasury equivalents.

The reflation trade remains alive and well -- global equities have risen for 10 straight sessions, and the Treasury yield curve tested the steepest levels in more than five years. Investors are banking on U.S. government spending and the coronavirus vaccine rollout to boost the economic recovery, though new variants are threatening to temper the outlook.

“We are moving into a new zone where the Fed is not willing to do additional expansion and that’s being reflected in the fixed income market with the back end of the curve beginning to move up substantially,” Saed Abukarsh, chief portfolio manager at Ark Capital Management Dubai Ltd., said on Bloomberg TV. “We could see that continuing to move up and that kind of throws in the question of equity-market valuations.”

Countries easing restrictions include Malaysia, which will allow national football and hockey leagues to start training. Hong Kong will permit restaurant dining and relax other social-distancing rules after the lunar new year holidays. New U.S. cases declined to the lowest week-to-week average since late October.

Japan may report better news on Monday with economists projecting 10.1% annualized growth in GDP for the first quarter, buoyed by exports and a smaller-than-expected hit to consumer spending. This may point to a sturdy post-pandemic rebound with little economic scarring.

Here are some key events coming up:

Earnings roll on with companies including, BHP Group, Daimler, Credit Suisse, Deere, Danone and Nestle.Euro-area finance ministers will discuss the bloc’s current economic situation and outlook on Tuesday.U.S. retail sales on Wednesday will likely show an increase for the first time since September.

These are the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 8:35 a.m. in Tokyo. The S&P 500 rose 0.5% on Friday.Futures on Japan’s Nikkei 225 advanced 0.7%.Australia’s S&P/ASX 200 Index gained 0.7%.

Currencies

The yen was at 105 per dollar.The euro bought $1.2120.The kiwi slipped 0.2% to 72.12 U.S. cents.

Bonds

The yield on 10-year Treasuries gained five basis points to 1.21% on Friday.

Commodities

West Texas Intermediate crude rose 1.4% to $60.29 a barrel.Gold fell 0.1% to $1,821 an ounce.

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