Asia Stocks Set for Steady Open; Treasuries Climb: Markets Wrap

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Asia Stocks Set for Steady Open; Treasuries Climb: Markets Wrap

Emily Barrett
·2 min read

(Bloomberg) -- Asian stocks are poised for a steady open Friday after a Wall Street rally on Federal Reserve Chairman Jerome Powell’s assurance that the central bank can reinvigorate the economy without stoking painful inflation.

Futures pointed higher in Japan and lower in Hong Kong. U.S. contracts climbed after the S&P 500 notched another record, though volumes on U.S. exchanges set new lows for the year. The Nasdaq 100 outperformed, aided by Apple Inc. and Tesla Inc. Powell’s assurance boosted Treasuries, driving the 10-year yield to a two-week low. The dollar held losses and gold retained an overnight gain.

Treasury 20-year bonds outperformed after comments from New York Fed Executive Vice President Lorie Logan sparked talk of increased central-bank purchases in this maturity.

The Fed commentary is reassuring investors that officials are committed to dovish policy that fosters a sustainable recovery from the health crisis. Powell said the central bank would react if inflation expectations started “moving persistently and materially” above tolerable levels. Despite the strength of some indicators, the recovery remains incomplete, as reflected in the latest unexpectedly high U.S. jobless claims.

“The doves are in control, and today’s cautious comments from Fed Chair Powell delivered another reiteration of their ultra-accommodative stance,” said Edward Moya, senior market analyst at Oanda in New York.

St. Louis Fed President James Bullard said it’s too soon for central bankers to discuss tapering asset purchases as long as the pandemic continues. The vaccine rollout remains in focus, with more than 704 million shots administered worldwide.

China’s ambitious effort to vaccinate 560 million people -- 40% of its population -- by the end of June is running into a supply shortage. The nation’s consumer and producer prices data are due later in the session.

These are some of the main moves in markets:

Stocks

S&P 500 futures were up 0.2% as of 8:12 a.m. Tokyo time. The S&P 500 closed 0.4% higher.Nasdaq 100 futures rose 0.3% after the index gained 1%.Nikkei 225 futures were up about 0.4%.Australia’s S&P/ASX 200 Index futures were flat.Hong Kong’s Hang Seng Index futures fell 0.2%.

Currencies

The Bloomberg Dollar Spot Index was little changed after a 0.4% drop.The euro was at $1.1917.The Japanese yen traded at 109.32 per dollar.

Bonds

The yield on 10-year Treasuries slid five basis points to 1.62%.Australia’s 10-year bond yield dipped three basis points to 1.71%.

Commodities

West Texas Intermediate crude climbed 0.3% to $59.80.Gold was at $1,755.46 an ounce.

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