Asia Stocks Set for Steady Start After U.S. Record: Markets Wrap

(Bloomberg) -- Asian stocks looked poised for a steady start Friday after strong economic data took Wall Street to another record amid a tilt to sectors that benefit from the U.S. reopening.

Futures edged up in Japan and Australia and were little changed in Hong Kong. U.S. contracts were stable after the S&P 500 posted its longest winning streak since February, helped by energy stocks, while technology lagged. Data showed solid U.S. manufacturing growth and a larger-than-expected drop in jobless claims, overshadowing concerns about the spread of the Covid-19 delta strain.

The dollar strengthened and Treasuries inched up ahead of Friday’s monthly payrolls report, which will help guide views on when the Federal Reserve may start pulling back on stimulus. Philadelphia Fed President Patrick Harker said cutting asset purchases by $10 billion a month might be reasonable and that he favored starting the process this year, according to a report.

Oil held gains, trading near $75 a barrel. The OPEC+ alliance descended into infighting, casting doubt on an agreement that could ease a surge in prices.

Investors are parsing data prints like the upcoming payrolls report for a sense of how close the Fed is getting to tapering policy accommodation as employment improves and inflationary pressures build. The International Monetary Fund said America’s central bank will likely begin to scale back asset purchases in the first half of 2022, and probably needs to raise interest rates later that year or in early 2023.

“With economic and earnings growth prospects robust, policy accommodative, and valuations still appealing relative to bonds, we believe the current environment is supportive of further equity gains,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note.

Here are some events to watch this week:

• ECB President Christine Lagarde speaks Friday
• The U.S. jobs report is due Friday

These are some of the main moves in markets:

Stocks

• S&P 500 futures were flat as of 7:55 a.m. in Tokyo. The index rose 0.5%
• Nasdaq 100 futures dipped 0.1%. The gauge was little changed
• Nikkei 225 futures climbed 0.2%
• S&P/ASX 200 futures increased 0.3%
• Hang Seng futures were little changed

Currencies

• The Bloomberg Dollar Spot Index was steady after rising 0.3%
• The euro was at $1.1847
• The Japanese yen was at 111.54 per dollar
• The offshore yuan traded at 6.4717 per dollar

Bonds

• The yield on 10-year Treasuries dipped one basis point to 1.46%

Commodities

• West Texas Intermediate crude was at $75.04 a barrel
• Gold was at $1,776.36 an ounce

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