Asia Stocks to Drift; Yields Climb With Dollar: Markets Wrap

(Bloomberg) -- Asia stocks looked set for a muted start as investors weighed the impact of falling commodity prices, talk of stimulus withdrawal and a resurgence in the delta virus variant.

Futures pointed higher in Japan, which reopens after a holiday, as well as in Australia and Hong Kong. U.S. contracts fluctuated. The S&P 500 closed little changed, while the Nasdaq 100 ticked up. The dollar rose with Treasury yields. Crude oil pared a decline after it touched the lowest in three weeks on concern the delta strain will hamper demand growth.

Gold was steady after Monday’s volatility and Bitcoin traded back above $45,000.

Investors mulled comments from Federal Reserve Bank of Atlanta President Raphael Bostic that the central bank should move to taper its asset purchases with another strong month or two of employment gains, and proceed faster than in past episodes. U.S. inflation data this week will be closely watched after Friday’s jobs report fanned expectations that unwinding will start soon.

At the same time, the spread of the highly contagious delta in corners of the world has raised concern the recovery from the pandemic will be derailed. New coronavirus cases in the U.S. surged to the highest weekly level since early February, while deaths increased the most since December.

“Risk appetite may struggle to extend this latest stock market rally,” said Edward Moya, senior market analyst at Oanda. “The delta variant shutdowns remain the biggest short-term risk. The selloff in commodities are driving growth concerns as some investors are turning cautious.”

For more market analysis read our MLIV blog.

Here are some key events to watch out for this week:

• Cleveland Fed President Loretta Mester; Kansas City Fed President Esther George among Fed speakers through the week
• The U.S. consumer price index on Wednesday is forecast to show prices increased again in July
• OPEC Monthly Oil Market Report due Thursday

These are the main moves in markets:

Stocks

• S&P 500 futures were flat as of 7:24 a.m. in Tokyo. The S&P 500 was little changed
• Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.2%
• Nikkei 225 futures rose 0.7%
• Australia’s S&P/ASX 200 Index futures rose 0.3%
• Hang Seng Index futures added 0.4% earlier

Currencies

• The Japanese yen was little changed at 110.32 per dollar
• The offshore yuan traded at 6.4855 per dollar
• The Bloomberg Dollar Spot Index rose 0.2%
• The euro traded at $1.1737

Bonds

• The yield on 10-year Treasuries advanced three basis points to 1.32%

Commodities

• West Texas Intermediate crude fell 2.6% to $66.48 a barrel
• Gold was at $1,729.87 an ounce

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