Stocks in Asia to Open Up; Dollar, Yields Declined: Markets Wrap

(Bloomberg) -- Asian stocks look set to open modestly higher Tuesday after a muted session on Wall Street, where technology giants weighed on the market. The dollar dropped with Treasury yields.

Futures pointed higher in Australia and Hong Kong. Trading will be limited with Japan and China among markets closed for holidays. U.S. contracts opened little changed after the S&P 500 Index ended near session lows, while Tesla Inc. and Amazon.com Inc. weighed on the Nasdaq 100. Benchmark 10-year Treasury yields dropped back to around 1.6% as Federal Reserve Chair Jerome Powell said the economic recovery remains patchy.

Commodities advanced, with silver leading gains in precious metals as the prospect of near-zero rates for longer boosted demand. Copper and oil climbed more than 1% amid broad rallies in energy and material stocks. The second-largest cryptocurrency, Ether, extended its surge to fresh records, nearing $3,400 early in Asia trade.

As a reminder of the fragility of the economy and rising inflation risks, Monday’s data showed growth among U.S. manufacturers cooled in April, while a gauge of prices paid for materials jumped to the highest since 2008. Powell reiterated that progress in the recovery has been uneven across racial and income divides. New York Fed President John Williams said current conditions are “not nearly enough” for a shift in the monetary policy stance.

“The world remains almost perfect for equities,” Chris Iggo, a chief investment officer at AXA Investment Managers, said in a note. Despite strong growth, rising earnings and rich valuations, “no-one is taking the punch-bowl away for now.”

Markets seem still to be looking through the persistent threat of the pandemic, focusing instead on the relative success of the vaccine rollouts in much of the developed world. Meanwhile, fierce new Covid-19 waves are enveloping India and parts of Southeast Asia, placing severe strain on their health-care systems and prompting appeals for help.

Here are some key events to watch this week:

• U.S. trade balance, factory orders, durable goods are due Tuesday
• The Reserve Bank of Australia monetary policy decision is coming Tuesday
• Chicago Fed President Charles Evans gives a virtual speech at an event hosted by Bard College on Wednesday. Cleveland Fed President Loretta Mester gives a virtual speech to the Boston Economic Club
• Bank of England rate decision Thursday
• The April U.S. employment report is released on Friday

These are some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 8:33 a.m. in Sydney. The S&P 500 rose 0.3%
• The Nasdaq 100 fell 0.4%
• Australia’s S&P/ASX 200 Index futures rose 0.2%
• Hang Seng Index futures added 0.8%

Currencies

• The yen traded at 109.03 per dollar
• The offshore yuan was at 6.4707 per dollar
• The Bloomberg Dollar Spot Index fell 0.3%
• The euro traded at $1.2061

Bonds

• The yield on 10-year Treasuries declined almost three basis points to 1.60%. Cash Treasuries won’t trade in Asia Tuesday

Commodities

• West Texas Intermediate crude rose 0.2% to $64.62 a barrel
• Gold was at $1,792.98 an ounce after climbing 1.3%

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