Asia Stocks Set for Muted Open Ahead of FOMC: Markets Wrap

(Bloomberg) -- Asian stocks are set for a muted open Tuesday as the earnings season unfolds and amid expectations the Federal Reserve will remain accommodative at its meeting this week despite robust growth.

Futures in Japan, Australia and Hong Kong were little changed. U.S. contracts traded in the green after the S&P 500 Index notched another record amid solid corporate earnings, with most of the main 11 industry groups gaining. Tesla Inc. shares slipped in after-hours trade after the firm reported a profits beat but left the multiyear outlook for growth in deliveries unchanged.

The U.S. 10-year Treasury yield hovered around its 50-day moving average, well below last month’s peaks, and the dollar was little changed. Copper, seen as a barometer of growth, surged to the highest in almost a decade.

While emerging economies from India to Brazil are grappling with a Covid-19 surge or renewed curbs, the developed world is on a firmer recovery path with a faster pace of vaccinations. U.S. data this week are expected to show growth accelerated to 6.8% annualized in the first quarter, and robust consumer demand. These reports aren’t shifting the central bank’s highly accommodative stance, with the Fed expected to keep rates on hold and asset purchases unchanged at this week’s meeting.

“No actual changes in policy are expected and Chairman Powell would, no doubt, prefer that markets also assume no change in Fed thinking,” David Kelly, global market strategist at JPMorgan Chase & Co., said in a note. “However, it is hard to see how the Fed can ignore further stock market gains and recent much stronger-than-expected readings. Consequently, some upgrade to their description of current economic activity seems likely.”

More than three-quarters of the S&P 500 companies that have reported results so far have beaten analysts’ estimates, according to data compiled by Bloomberg. Amazon Inc., Facebook Inc. and Apple Inc. are due to report this week.

Elsewhere, oil was steady amid concerns about weakening demand from India after the nation reported a million new coronavirus cases in three days.

Here are some key events to watch this week:

• Bloomberg Live hosts the Bloomberg Green Summit Monday through April 27
• Bank of Japan rate decision and Governor Haruhiko Kuroda briefing Tuesday
• Fed Chair Jerome Powell holds a press conference Wednesday following the Fed meeting
• Joe Biden makes his first address as president to a joint session of Congress Wednesday
• U.S. GDP is forecast to show growth strengthened in the first quarter, bolstered by government stimulus Thursday

These are some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.1% as of 7:36 a.m. in Tokyo. The index rose 0.2%
• Nikkei 225 futures were down 0.1%
• Australia’s S&P/ASX 200 Index futures were 0.1% higher
• Hang Seng Index futures fell 0.2% earlier

Currencies

• The yen was at 108.18 per dollar
• The offshore yuan was at 6.4738 per dollar
• The Bloomberg Dollar Spot Index was steady
• The euro was little changed at $1.2087

Bonds

• The yield on 10-year Treasuries advanced one basis point to 1.57%

Commodities

• West Texas Intermediate crude was at $62.01 a barrel
• Gold was steady at $1,781.07 an ounce

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