Asia Stocks Eye Steady Start; Dollar, Yields Rise: Markets Wrap

(Bloomberg) -- Asian stocks were set for a steady open Thursday after gains in U.S. shares tied to the economic reopening from the pandemic. The dollar climbed with Treasury yields.

Japanese, Australian and Hong Kong equity futures were little changed. Traders will be monitoring China to see if stocks and the currency extend a rally. U.S. equity contracts fluctuated after the Russell 2000 Index of small-caps jumped overnight, while energy producers, retailers and banks helped the S&P 500 Index to a more modest increase. The tech-heavy Nasdaq 100 gauge edged up.

Oil held above $66 a barrel as shrinking crude inventories and further signs of a demand pick-up in the U.S. countered concerns around the prospect of more Iranian supply. Gold slipped from a four-month high.

The dollar was steady after rising for the first time this week amid short covering as investors rebalance their portfolios ahead of month end. Bitcoin retreated back below $40,000.

Traders continue to weigh the threat that price pressures may pose to the loose monetary policy that is stoking the economic recovery and supporting financial markets. Stocks remain near all-time highs and Federal Reserve officials have repeatedly said they expect a transitory rather than more serious run-up in inflation. Interest-rate volatility has been sliding and Treasury yields are well below this year’s peaks.

“Investors appear to be giving the Fed the benefit of the doubt with their transitory inflation forecast, but we suspect the window of confidence could close without supporting evidence in coming months,” said Craig W. Johnson, technical market strategist at Piper Sandler & Co.. He expects economic uncertainty and volatility will likely remain high as traders await clarity on inflation trends and tapering prospects.

Here are some events this week:

• U.S. initial jobless claims, GDP, durable goods, pending home sales on Thursday.

These are some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 8:17 a.m. in Tokyo. The S&P 500 rose 0.2%
• Nasdaq 100 contracts were little changed. The Nasdaq 100 rose 0.3%
• Nikkei 225 futures were flat
• Australia’s S&P/ASX 200 Index futures were little changed
• Hong Kong’s Hang Seng Index futures were steady

Currencies

• The yen was at 109.12 per dollar
• The offshore yuan traded at 6.3834 per dollar
• The Bloomberg Dollar Spot Index was little changed
• The euro was at $1.2194

Bonds

• The yield on 10-year Treasuries advanced two basis points to 1.58%
• Australia’s 10-year bond yield fell about one basis point to 1.66%

Commodities

• West Texas Intermediate crude dipped 0.2% to $66.10 a barrel
• Gold was at $1,896.47 an ounce

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