Asia Stocks to Open Steady as U.S. Futures Drift: Markets Wrap

(Bloomberg) -- Asia stocks look set to trade cautiously at the open Monday as investors assess the pace of economic recovery.

Futures were little changed in Australia, Japan and Hong Kong. Australian shares will be closely watched after Sydney went into a two-week lockdown to stem a resurgence of Covid-19. U.S. futures edged higher. The S&P 500 had its best week since February, with financial and retail shares beating the technology giants that outperformed at the height of the pandemic. Treasuries retreated.

Cryptocurrencies will be closely watched after the U.K. restricted an affiliate of crypto exchange Binance from doing business in the country. Bitcoin rose for a second day, gaining as much as 6% to $34,592 in the Asian morning on Monday.

Global stocks ended last week at a record high as anxiety about the Federal Reserve’s hawkish tilt eased, with investors dialing back concerns that U.S. policy makers will rush to boost interest rates despite mounting inflation pressures. Volatility receded, with the Cboe Volatility Index, or the VIX, sinking to pre-pandemic levels.

The Fed “are far away from tapering, they are far away from increasing rates, but at some point, if the markets sees the Fed being too far behind the curve you will start to see some adjustment on the long end of the curve,” Charles-Henry Monchau, chief investment officer at FlowBank SA, said on Bloomberg TV. “We might not have seen the peak in bond yields. I would not be surprised to see some adjustments in the coming months. That might be an excuse for the market to take a bit of profit.”

Data Friday showed personal spending stagnated in May, while a closely watched inflation measure continued to climb. Meantime, U.S. consumer sentiment rose in June by less than forecast and longer-term inflation expectations moderated from a month earlier.

Meanwhile, U.S. President Joe Biden’s $579 billion infrastructure plan appears to be back on track.

Here are some events to watch in the markets this week:

• Reserve Bank of Australia Governor Philip Lowe addresses a banking summit in Sydney Tuesday
• OECD meets in Paris to finalize a proposal to overhaul global minimum corporate taxation Wednesday
• China’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party Thursday
• OPEC+ ministerial meeting Thursday
• ECB President Christine Lagarde speaks Friday
• The U.S. jobs report is forecast to show an acceleration in payrolls growth in June Friday

For more market commentary, follow the MLIV blog.

These are some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.1% as of 8:22 a.m. in Tokyo. The S&P 500 rose 0.3% Friday
• Nasdaq 100 rose 0.1%. The Nasdaq 100 fell less than 0.1%
• Nikkei 225 futures fell 0.1%
• Australia’s S&P/ASX 200 Index futures were little changed
• Hang Seng Index futures rose 0.1% earlier

Currencies

• The yen was little changed at 110.80 per dollar
• The offshore yuan was at 6.4596 per dollar
• The Bloomberg Dollar Spot Index was little changed
• The euro was at $1.1937
• The Aussie was at 75.92 U.S. cents

Bonds

• The yield on 10-year Treasuries advanced three basis points to 1.52% Friday
• Australia’s 10-year bond yield added two basis points to 1.59%

Commodities

• West Texas Intermediate crude was steady at $74.10 a barrel
• Gold gained 0.3% to $1,782.20 an ounce

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