Asia Stocks Climb After Robust Data Boost U.S.: Markets Wrap

(Bloomberg) -- Asian stocks headed higher after rallies in U.S. indexes on positive economic data, and commodities extended their advance. The dollar held losses.

Hong Kong and South Korea led modest gains across the region that lifted MSCI Inc.’s gauge. U.S. contracts climbed after renewed gains in U.S. benchmarks overnight, which included a fresh record for the Dow Jones Industrial Average. Copper soared to an all-time high on expectations that rebounding economies will spur a boom in global demand.

China’s latest trade data showed exports rose well ahead of expectations and imports saw the fastest growth since 2011. Traders shrugged off news overnight that the Biden administration is likely to preserve limits on U.S. investments in certain Chinese companies.

U.S. economic reports helped sentiment, as applications for state unemployment insurance fell to a fresh pandemic low, and separate data showed a rebound in productivity. Traders now turn to Friday’s payrolls numbers. Treasuries were steady with yields well below recent highs.

Investors are focusing on strengthening growth in the world’s largest economies, shaking off concerns for now that a faster-than-expected rebound could spur excessive inflation. The Federal Reserve remains committed to near-zero interest rates to bring about a full recovery, though an announcement of a pullback in its heavy monthly bond purchases seems increasingly likely in the second half of this year.

“Most of the developed markets are going to treat the spike in inflation as transitory unless they start to see significant pass-through of commodity prices and wage inflation,” said Binay Chandgothia, portfolio manager at Principal Global Investors.

Increased attention to stretched valuations could spur more talk of the Fed adjusting policy. The central bank’s semi-annual financial stability report noted rising appetite for risk across a variety of asset markets could exacerbate vulnerabilities in the U.S. financial system.

Elsewhere, spot iron ore broke $200 a ton for the first time, while copper approached a record high. Oil climbed.

These are some of the main moves in markets:

Stocks

• S&P 500 futures were up 0.1% at 12:10 p.m. in Tokyo, after the index rose 0.8%
• Nasdaq 100 contracts rose 0.3%. The index gained 0.8%.
• Japan’s Topix Index climbed 0.4%
• Hong Kong’s Hang Seng Index rose 0.6%
• The Shanghai Composite was up 0.4%
• South Korea’s Kospi was up 0.7%
• Australia’s S&P/ASX 200 Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index was steady
• The euro traded at $1.2067
• The British pound was up 0.1% at $1.3906
• The Japanese yen was 109.13 per dollar

Bonds

• The yield on 10-year Treasuries was little changed at 1.56%
• Australia’s 10-year yield rose held at 1.69%

Commodities

• West Texas Intermediate crude was up 0.5% at $65 a barrel
• Gold futures traded climbed 0.2% to $1,819 an ounce

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