Saturday, January 22

Stocks Stable, Futures Rising In China’s Eyes; oil rises: markets envelop


Asian stocks fluctuated on Monday as investors weighed the implications of rising energy prices and China’s risks. The dollar went down.

MSCI Inc.’s Asian Stock Index rose. Hong Kong had modest gains, while Japan fell back. Shares in Shanghai fell as materials stocks fell due to concerns that power restrictions are affecting manufacturing and lingering concerns about new regulatory restrictions. American and European futures rose.

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Commodities like iron ore and commodity-linked currencies like the Australian dollar rose. West Texas Intermediate extended a rally to hit $ 75 a barrel, while Brent hit the highest level since October 2018 on signs that the oil market is adjusting due to a global energy crisis. Ten-year Treasury yields broke the top of a range that has held since mid-July, topping 1.4% after aggressive messages from the Federal Reserve and the Bank of England last week.

Bitcoin was trading around $ 44,000. Digital currencies tumbled on Friday as China stepped up its momentum to curb crypto speculation and mining, but recovered much of the drop over the weekend.

While global stocks posted their first weekly advance in three as traders ignored concerns about a Federal Reserve pullback in stimulus and contagion risks from China Evergrande Group, hurdles remain. Investors are turning their attention more to China, where an energy crisis is brewing and developers face liquidity pressures. The impact of higher bond yields on stock prices is also receiving attention.

“It looks like we’ve gotten over the concerns about the Fed’s phasing out,” Steve Brice, chief investment officer at Standard Chartered Wealth Management, told Bloomberg Television. “Clearly, what is happening in the Chinese economy is receiving much more attention globally. We will certainly see a slowdown in the economy as we move into next year. The question now is to what extent that is going to happen and the knock-on implications for global growth. ”

Amid the Evergrande developments, the group’s electric car unit sank into Hong Kong operations after it warned of a “severe funding shortage” and scrapped plans to list in Shanghai. Separately, Sunac China Holdings Ltd. dollar stocks and bonds prolonged declines as concerns mounted about the developer’s financial health.

The euro was stable as the German elections did not produce a clear winner, raising investor concerns over a protracted decision on the leadership of Europe’s largest economy. Olaf Scholz of the Social Democrats was ahead of Chancellor Angela Merkel’s conservatives.

Meanwhile, in the United States, House Speaker Nancy Pelosi pledged to pass a $ 550 billion infrastructure law this week.

Here are some events to watch this week:

  • Fed Chairman Jerome Powell and Treasury Secretary Yellen to testify at a Senate Banking Committee hearing on Tuesday
  • European Central Bank President Christine Lagarde speaks Tuesday
  • Japan’s ruling party votes to choose leader, Wednesday
  • Central bank heads Andrew Bailey (BOE), Haruhiko Kuroda (BOJ), Christine Lagarde (ECB) and Jerome Powell (Fed) take part in a panel at the ECB Forum, Wednesday
  • House Financial Services Committee hearing on the Fed, the Treasury’s response to the pandemic, Thursday
  • China Caixin Manufacturing PMI, Non-Manufacturing PMI, Thursday
  • US Manufacturing PMI, Friday

Some of the main movements in the markets:

Stocks

  • S&P 500 futures rose 0.5% at 6:56 am in London. The S&P 500 rose 0.2%
  • Nasdaq 100 futures were up 0.4%. The Nasdaq 100 changed little
  • The topix index changed little
  • Australia’s S & P / ASX 200 Index rose 0.7%
  • The Kospi index rose 0.2%
  • The Hang Seng Index rose 0.5%
  • The Shanghai Composite Index fell 0.7%
  • Euro Stoxx 50 futures rose 0.8%

Currencies

  • The Japanese yen was at 110.63 to the dollar, up 0.1%.
  • The offshore yuan was at 6.4597 to the dollar.
  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro is trading at $ 1.1721.

Captivity

  • The 10-year Treasury yield was 1.45%.
  • The yield on Australia’s 10-year bonds was 1.41%.

Raw Materials

  • West Texas Intermediate crude rose 1.3% to $ 74.98 a barrel
  • Gold added 0.5% to $ 1,759.62 an ounce

© 2021 Bloomberg


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