Asia Stocks Steady as U.S. Shrugs Off Inflation: Markets Wrap

Emily Barrett
·3 min read

(Bloomberg) -- Asian stocks look calm heading into the open following gains in U.S. equities and bonds, as investors shrugged off a higher-than-forecast rise in U.S. inflation to focus on the path of the global recovery.

Equity futures were little changed Japan and Hong Kong. U.S. contracts were steady following another all-time high for the S&P 500 and Nasdaq 100 indexes, as the White House said the vaccine campaign remains on track despite a pause in Johnson & Johnson doses amid concerns about blood clotting.

Treasuries extended gains on a successful sale of 30-year bonds, which resolved concerns that poor demand could spark another bout of volatility. The U.S. dollar was steady in early Asia trade.

In Asia, a sharp selloff in one of China’s largest bad-debt managers has shaken credit markets, raising concerns that other heavily leveraged borrowers may also stumble.

The latest data showing U.S. consumer prices rose more than expected last month had little impact given the distortions surrounding the year-earlier slump in price pressures. The market response signals confidence that the recovery remains on track with support from central banks and government spending.

“A lot of growth and inflation have already been priced into the market,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “It’s almost as if you need to exceed those expectations in order to see a more pronounced reaction from markets.”

Runaway inflation, along with higher borrowing costs and taxes, have replaced the pandemic as the top concerns for global fund managers, according to the latest Bank of America Corp. survey.

Meanwhile, Bitcoin jumped to an all-time high, and the Nasdaq set a reference price of $250 for the direct listing of Coinbase Global Inc., the cryptocurrency exchange that will start trading Wednesday. Oil traded above $60 a barrel.

Some key events to watch this week:

Banks and financial firms begin reporting first-quarter earnings, including JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc.Economic Club of Washington hosts Fed Chair Jerome Powell for a moderated Q&A on Wednesday.U.S. Federal Reserve releases Beige Book on Wednesday.U.S. data including initial jobless claims, industrial production and retail sales come Thursday.China economic growth, industrial production and retail sales figures are on Friday.

These are some of the main moves in financial markets:

Stocks

S&P 500 futures were flat as of 8:10 a.m. in Tokyo. The index closed 0.3% higher.Nikkei 225 futures were little changed.Hang Seng futures rose 0.3% earlier.S&P/ASX 200 futures were 0.3% higher.

Currencies

The Bloomberg Dollar Spot Index was little changed.The yen was at 109.00 per dollar.The euro was at $1.1952.The offshore yuan traded around 6.5440 per dollar.

Bonds

The yield on 10-year Treasuries fell five basis points to 1.61% in U.S. trade.

Commodities

West Texas Intermediate crude traded at $60.54 a barrel.Gold was at $1,745.78 an ounce.

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