Asia Stocks Eye Steady Open as Virus, China Weigh: Markets Wrap

Asia Stocks Eye Steady Open as Virus, China Weigh: Markets Wrap
Andreea Papuc
·3 min read

(Bloomberg) -- Asian stocks are set for a cautious open Wednesday as China’s clampdown on its technology giants and the spread of the delta Covid-19 strain subdue sentiment. Crude oil retreated.

Futures edged up in Japan, Australia and Hong Kong. Traders will be monitoring SoftBank Group Corp. on a potential block of its $40 billion sale of Arm Ltd. to chip company Nvidia Corp. U.S. equity contracts fluctuated after favorable corporate earnings took the S&P 500 to another record close overnight.

Chinese stocks listed in the U.S. slid amid fears online gaming may be the next industry in the firing line of Beijing’s sweeping regulatory crackdown on technology giants. Alibaba Group Holding Ltd.’s revenue missed estimates for the first time in over two years, a sign the clampdown is taking a toll.

The 10-year U.S. Treasury yield held its retreat and oil dipped toward $70 a barrel. The delta strain is exacerbating concerns that the rebound from the pandemic is losing steam. A drop in New Zealand’s jobless rate strengthened rate-hike bets, bolstering its currency but weighing on the 10-year bond.

Investors remain cautious as they weigh robust earnings against rising Covid-19 cases and worries about inflation. Key U.S. jobs data this week could stoke market swings if they lead investors to adjust expectations over the Federal Reserve’s likely timeline for eventually tapering stimulus. Fed Vice Chair Richard Clarida is due to speak about monetary policy Wednesday.

“We think the delta variant is not going to stop the recovery, it’s just going to delay it,” Laila Pence, Pence Wealth Management president, said on Bloomberg Television. “The Federal Reserve is going to live with a lot more inflation. They don’t want to derail the recovery.”

The spread of the delta coronavirus variant has pushed the threshold for herd immunity to well over 80% and potentially approaching 90%, according to an Infectious Diseases Society of America briefing.

Here are some key events to watch this week:

Treasury quarterly refunding announcement is expected WednesdayFederal Reserve Vice Chair Richard Clarida due to speak WednesdayBank of England is expected to keep its benchmark interest rate and its bond-buying target unchanged ThursdayReserve Bank of India monetary policy decision, briefing FridayThe U.S. jobs report is expected to show another robust month of hiring Friday

For more market analysis read our MLIV blog.

Stocks

S&P 500 futures slipped 0.2% as of 8:34 a.m. in Tokyo. The S&P 500 rose 0.8%Nasdaq 100 futures were steady. The Nasdaq 100 rose 0.7%Nikkei 225 futures climbed 0.3%Australia’s S&P/ASX 200 Index futures added 0.1%Hang Seng Index future rose 0.2% earlier

Currencies

The yen traded at 109.00 per dollarThe offshore yuan was at 6.4668 per dollarThe Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1868

Bonds

The yield on 10-year Treasuries was little changed at 1.17%Australia’s 10-year bond yield was steady at 1.16%

Commodities

West Texas Intermediate crude fell 0.2% to $70.41 a barrelGold was at $1,810.83 an ounce

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