Stocks and futures showed a degree of stabilization in Asia on Monday as investors weighed in on the latest in omicron variance and the regulatory outlook for Chinese tech companies. Treasuries trimmed part of Friday’s rally.
US futures rose, while benchmark indices recorded moderate declines in Japan and Australia. In Hong Kong, an index of Chinese tech stocks fell for a third day. Mainland Chinese stocks rose and the nation’s government bonds rallied amid bets that the central bank will soon ease monetary policy to aid growth.
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China’s securities watchdog on Sunday tried to downplay fears about the withdrawal of Chinese companies from US exchanges. Didi Global Inc.’s plans to change its listing to Hong Kong from New York sent the nation’s shares in the US plummeting and raised fears that others might follow.
Yields on Treasuries rose, cutting Friday’s slide that brought the 10-year yield closer to 1.30%. The focus is on US consumer prices, which are expected to show the biggest annual advance in decades, keeping pressure on the Federal Reserve to apply faster policy tightening.
Markets are being hit by headwinds, such as Fed Chairman Jerome Powell’s aggressive turn to deal with high inflation. That assessment is unlikely to change after US jobs posted the smallest gain this year. The uncertainty over omicron is another headache for investors, as are developments in indebted developers in China.
“We expect risk sentiment to continue to ripple through the markets,” Jun Bei Liu, portfolio manager at Tribeca Investment Partners, told Bloomberg Television. However, “this is something we will soon shrug our shoulders from. The market has done very well so far this calendar year, people are taking some money off the table. Ultimately, interest rates will go up, but not as fast as we think, ”and investors will look beyond omicron, he said.
While markets are nervous about omicron, South Africa reported that the variant is not driving an increase in hospitalizations, and US medical adviser Anthony Fauci said there did not appear to be “a large degree of severity for omicron,” though he cautioned that it is. too soon. be sure. The Moderna Inc. president said there is a “real risk” that existing vaccines will be less effective against omicron.
Elsewhere, gold maintained an advance and oil rose after Saudi Arabia raised its crude prices. Cryptocurrencies were swept up in the wave of risk reduction, with Bitcoin falling on Saturday and currently below $ 50,000.
Here are some key events to watch this week:
- Reserve Bank of Australia policy decision on Tuesday
- Eurozone GDP Tuesday
- Reserve Bank of India rate decision on Wednesday
- Olaf Scholz to replace Angela Merkel as chancellor on Wednesday
- European Central Bank President Christine Lagarde speaks at a conference Wednesday
- Federal Reserve Bank of Minneapolis Chairman Neel Kashkari speaks Thursday
- Reserve Bank of Australia Governor Philip Lowe speaks Thursday
- China CPI, PPI, money supply, new loans in yuan, financing added Thursday
- US CPI Friday
Some of the main movements in the markets:
- S&P 500 futures were up 0.5% at 2:14 pm in Tokyo. The S&P 500 fell 0.8% on Friday
- Nasdaq 100 futures were up 0.1%. The Nasdaq 100 fell 1.7% on Friday
- The Topix index fell 0.4%
- Australia’s S & P / ASX 200 Index lost 0.2%
- The Hang Seng Index fell 1.3%
- The Shanghai Composite Index rose 0.4%
- Euro Stoxx 50 futures rose 1.2%
- The Japanese yen was at 113.05 to the dollar, down 0.2%.
- The offshore yuan was at 6.3701 to the dollar.
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was at $ 1.1287
- The 10-year Treasury yield rose about five basis points to 1.39%.
- The yield on Australia’s 10-year bonds fell two basis points to 1.59%.
- West Texas Intermediate crude rose 2.3% to $ 67.80 a barrel
- Gold was at $ 1,781.78 an ounce
© 2021 Bloomberg