Asia Stocks Set for Modest Gains; Oil Rebounds: Markets Wrap

(Bloomberg) -- Asian stocks looked set to follow their U.S. peers higher as investors assessed the ability of the economy to sustain less stimulus and rising virus outbreaks. Treasuries slipped and the dollar was steady.

Futures pointed to modest gains in Japan and Australia and dipped in Hong Kong. U.S. contracts were little changed in Asia. Earlier, the S&P 500 climbed to an all-time high, while the tech-heavy Nasdaq 100 declined. Chip stocks retreated, while energy shares rallied. Crude oil bounced back from a three-week low on bets that the global demand recovery will remain intact despite the fast-spreading delta virus variant.

Investor focus turns to U.S. price data Wednesday as Federal Reserve officials talk up the prospects of unwinding some of the fiscal stimulus that has helped the recovery from the pandemic. Chicago Fed President Charles Evans said he expects substantial further progress later this year on the central bank’s tapering intentions.

The delta Covid-19 variant is sweeping across the U.S. with hospitals parceling out beds for patients, and hunting for doctors and nurses. The outbreak is also growing in China, with more than 100 symptomatic cases reported on Tuesday.

“There’s clearly more focus and concern on the delta variant of Covid, but, to this point, markets have appraised that as a manageable risk,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “The market is climbing the wall of worry.”

Meanwhile, the Senate passed a $550 billion infrastructure plan, sending the legislation to the House for a vote.

Elsewhere, Bitcoin was back above $45,000 amid renewed fervor for the digital coin. A change to cryptocurrency reporting rules in the infrastructure bill was blocked in the Senate, leaving language for broad oversight of virtual currencies in the legislation.

For more market analysis read our MLIV blog.

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

• 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 little changed as of 7:33 a.m. in Tokyo. The S&P 500 rose 0.1%
• Nasdaq 100 contracts were little changed. The Nasdaq 100 fell 0.5%
• Nikkei 225 futures rose 0.3%
• Australia’s S&P/ASX 200 Index futures were up 0.3%
• Hang Seng Index futures dipped 0.2% earlier

Currencies

• The Japanese yen was at 110.57 per dollar
• The offshore yuan traded at 6.4874 per dollar
• The Bloomberg Dollar Spot Index rose 0.1%
• The euro traded at $1.1720

Bonds

• The yield on 10-year Treasuries advanced three basis points to 1.35%

Commodities

• West Texas Intermediate crude rose 0.3% to $68.49 a barrel
• Gold was at $1,729.51 an ounce

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