Asia Stocks Set for Muted Open; Dollar Steady: Markets Wrap

(Bloomberg) -- Asian stocks look poised for a muted open as virus cases in the region pick up and concerns about the economic outlook weighed on their U.S. peers.

Futures were little changed in Japan, Australia and Hong Kong. U.S. contracts were steady as they opened in Asia. Technology and communication services stocks led the benchmark S&P 500 lower, while energy shares rose. Apple Inc. and Microsoft Corp. weighed on the tech-heavy Nasdaq 100. Benchmark Treasuries retreated. The dollar stabilized after dropping for a third consecutive day against its peers.

Oil held an advance to a two-year high as rising optimism around a demand recovery in regions such as the U.S. offset Covid-19 flare-ups in parts of Asia.

Investors this week will parse the minutes from the Federal Open Market Committee’s latest meeting for any discussion about accelerating price pressures, and hints of a timeline for reducing asset purchases.

Federal Reserve Vice Chair Richard Clarida said during a webinar that the weaker-than-expected April payroll report shows “we have not made substantial further progress” on the central bank’s goals for employment and inflation laid out as thresholds to begin scaling back the central bank’s massive monthly bond purchases.

“Investors should brace for further bouts of volatility, driven by inflation data along with other risks, such as setbacks in curbing the pandemic,” wrote UBS Global Wealth Management’s Chief Investment Officer Mark Haefele. “But we don’t see inflation concerns ending the rally in stocks, which we expect to be led by cyclical parts of the market as the global economic reopening broadens.”

Meanwhile, Hong Kong added Singapore to its list of high-risk nations as cases rose in the city-state, with the highly transmissible strain of Covid-19 that surfaced in India becoming more prominent among the growing number of unlinked cases. The U.S. has recorded its lowest number of new coronavirus infections since the early days of the pandemic.

Elsewhere, Bitcoin fluctuated following a volatile weekend that saw comments from Tesla Inc.’s Elon Musk whipsaw prices. Coinbase Global Inc. fell to a record low and below the reference price used in its April direct listing. Gold traded near its highest in almost four months.

Here are some key events this week:

• Reserve Bank of Australia publishes minutes of its latest meeting Tuesday
• The Fed publishes minutes from its April meeting Wednesday, which may provide clues to officials’ views on the recovery and how they define “transitory” when it comes to inflation

These are some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 8:04 a.m. in Tokyo. The S&P 500 fell 0.3%
• Nasdaq 100 futures were flat. The Nasdaq 100 fell 0.6%
• Nikkei 225 futures fell 0.1%
• Australia’s S&P/ASX 200 Index futures rose 0.2%
• Hong Kong’s Hang Seng Index futures rose 0.2%

Currencies

• The yen traded at 109.19 per dollar
• The offshore yuan was at 6.4422 per dollar
• The Bloomberg Dollar Spot Index was little changed
• The euro was at $1.2154

Bonds

• The yield on 10-year Treasuries advanced two basis points to 1.64%
• Australia’s 10-year bond yield rose four basis points to 1.79%

Commodities

• West Texas Intermediate crude traded at $66.27 a barrel
• Gold was at $1,865.88 after increasing 1.3%

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