Asian Stocks Mixed, U.S. Futures Up After Tech Dip: Markets Wrap

Asian Stocks Mixed, U.S. Futures Up After Tech Dip: Markets Wrap
Andreea Papuc
·3 min read

(Bloomberg) -- Asian stocks were steady and U.S. equity futures edged up Wednesday after Treasury Secretary Janet Yellen’s comments on interest rates rattled markets overnight amid a technology selloff. The dollar held gains.

S&P 500 contracts advanced following a climb in commodity, financial and industrial sectors that helped the gauge pare losses. Nasdaq 100 futures were in the green after weakness in the likes of Apple Inc., Tesla Inc. and Amazon.com Inc. dragged the index lower. Australian shares rose but Hong Kong fluctuated. Markets in Japan, China and South Korea are shut for holidays.

Yellen said rates will likely rise as government spending ramps up and the economy responds with faster growth, comments that economists regarded as self-evident. In a subsequent interview, the former Federal Reserve Chair said she wasn’t predicting or recommending rate hikes.

Commodities rallied to the highest in almost a decade as the economic rebound from the pandemic stokes demand for metals, food and energy. New Zealand’s dollar climbed against all its Group-of-10 peers on a strong jobs report. Treasury futures were steady, with cash markets closed in Asia.

The debate on whether government spending could spur excessive inflation comes as stock valuations hover near the highest levels in two decades. Investors have been reluctant to push rallies further despite some blowout corporate earnings. While the Fed has assured markets that interest rates will remain at current lows throughout the recovery, strengthening data raised concerns that policy makers may move to tighten sooner than anticipated.

Read: Nasdaq 100’s Worst Day Since March Sparked by Inflation Fears

“Yellen’s comments did not specify a timeframe for rises and she clarified her comments by saying that she was not recommending FOMC rate hikes,” said Kim Mundy, currency strategist at the Commonwealth Bank of Australia. “We still expect the FOMC will be very patient as economic data improves.”

The latest numbers showed the U.S. trade deficit widening to a new record in March. Meanwhile, a senior White House economic aide demurred on the question of whether President Joe Biden will nominate Fed Chair Jerome Powell for a second four-year term, saying the decision on selecting the next central bank chief will come after a thorough process.

Oil extended a rally amid declining U.S. stockpiles and reopening drives in the U.S. and Europe.

Here are some key events to watch this week:

U.S. ADP employment change is due WednesdayChicago 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 ClubBank of England rate decision ThursdayThe April U.S. employment report is released on Friday

These are some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 9:38 a.m. in Hong Kong. The S&P 500 Index lost 0.7%Nasdaq 100 contracts added 0.1% after the index fell 1.9%Australia’s S&P/ASX 200 increased 0.7%Hong Kong’s Hang Seng Index rose 0.2%

Currencies

The Japanese yen traded at 109.35 per dollarThe offshore yuan was at 6.4840 per dollarThe Bloomberg Dollar Spot Index fell less than 0.1%The euro traded at $1.2020

Bonds

The yield on 10-year Treasuries was at 1.59% on Tuesday

Commodities

West Texas Intermediate crude rose 1% to $66.34 a barrelGold was at $1,778.85 an ounce

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©2021 Bloomberg L.P.

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