Global markets: Asian stocks steady amid oil rally; treasuries dip

Global markets: Higher energy costs could fan the inflationary pressures that are adding to the case for the Federal Reserve to temper emergency stimulus in the months ahead. (AP)Premium
Global markets: Higher energy costs could fan the inflationary pressures that are adding to the case for the Federal Reserve to temper emergency stimulus in the months ahead. (AP)
 3 min read . Updated: 06 Jul 2021, 06:03 AM IST Bloomberg

Global markets: Gains were modest in Japan, Australia and South Korea. U.S. stocks and Treasury markets were closed Monday for the Independence Day holiday, keeping trading subdued

Global markets: Asian stocks opened steady Tuesday as traders weigh a jump in crude oil amid an OPEC+ crisis that derailed a deal to boost output. Treasuries dipped as trading resumed after a U.S. holiday.

Gains were modest in Japan, Australia and South Korea. U.S. stocks and Treasury markets were closed Monday for the Independence Day holiday, keeping trading subdued. European shares edged higher and U.S contracts fluctuated in Asia. A gauge of the dollar was little changed.

OPEC+ was plunged into crisis as a worsening fight between Saudi Arabia and the United Arab Emirates blocked an oil-supply increase. The breakdown of talks has sent crude climbing toward $80 a barrel, but also raises the risk of a price war if the conflict at the alliance escalates.

Australia’s dollar climbed ahead of a Reserve Bank of Australia meeting. The central bank is expected to pare back some policy support despite ongoing curbs against a recent Covid-19 flareup. New Zealand’s currency rallied on expectations of tighter monetary policy.

Higher energy costs could fan the inflationary pressures that are adding to the case for the Federal Reserve to temper emergency stimulus in the months ahead. The latest U.S. central bank minutes due Wednesday may provide further context about its hawkish pivot last month.

The risk of oil at $100 a barrel “is so correlated with short-run inflation that it will make the market very, very edgy, and we know that the Federal Reserve is both watching the economic data but also markets," Alan Higgins, chief investment officer at Coutts & Co., said on Bloomberg Television.

Lingering jitters from China’s cybersecurity crackdown are likely to shadow the market open there. One of the most high-profile probes is into ride-hailing giant Didi Global Inc., which only just listed in the U.S. The saga threatens to make China’s biggest tech firms a riskier bet.

Elsewhere, the U.K. announced plans to end social distancing and capacity limits at venues in England from July 19, saying that people must learn to live with coronavirus. The pound extended an advance.

MINT PREMIUM See All

Here are some events to watch this week:

  • Reserve Bank of Australia policy decision Tuesday
  • FOMC minutes Wednesday
  • The Group of 20 finance ministers and central bankers meet in Venice on Friday
  • China PPI and CPI data released on Friday

These are some of the main moves in markets:

Stocks

  • S&P 500 futures were little changed as of 9:04 a.m. in Tokyo
  • Nasdaq 100 futures were steady
  • The Stoxx Europe 600 rose 0.3%
  • Topix index rose 0.2%
  • Australia’s S&P/ASX 200 Index rose 0.2%
  • Kospi index gained 0.3%
  • Hang Seng Index futures fell 0.2%

Currencies

  • The Japanese yen traded at 110.86 per dollar
  • The offshore yuan was at 6.4644 per dollar
  • The Bloomberg Dollar Spot Index was little flat
  • The euro was at $1.1861

Bonds

  • Ten-year U.S. Treasury yields rose one basis point to 1.44%
  • Australia’s 10-year bond yield climbed four basis points to 1.47%

Commodities

  • West Texas Intermediate crude rose 1.4% to $76.31 a barrel
  • Gold was at $1,791.40 an ounce

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close