Asian stocks are expected to rise; Treasury, fall of the dollar: market envelope

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(Bloomberg) – Asian stocks looked set to rise on Tuesday after US stocks extended a winning streak over optimism that the economic recovery can overcome inflation risks. The dollar and treasury bills have gone down.

Futures contracts for Japan, Australia and Hong Kong climbed. The S&P 500 edged up for an eighth session, the longest winning streak since 2017. A drop from Tesla Inc. weighed on the Nasdaq 100 after Elon Musk’s Twitter followers in a poll he put in place voted in favor of the billionaire selling 10% of his shares. participation in the company.

Yields on Treasuries rose under a weak three-year auction. Meanwhile, the yield on inflation-protected 30-year Treasuries slipped to an all-time high, a sign of lingering concerns about the price pressures weighing on the global economy.

The problems of the Chinese real estate sector remain at the center of the concerns. Two holders of dollar tickets sold by a unit of the China Evergrande group have yet to receive payment for the coupons that were officially due on Saturday.

Coronavirus treatments, easing travel restrictions and passing a US $ 550 billion infrastructure bill have boosted sentiment. Major central banks also persist with a still accommodative monetary policy, in part due to expectations that inflationary pressures caused by crunching supply chains and energy prices will prove to be temporary.

“Central banks were less hawkish than markets expected last week, so we are seeing even lower real yields in negative territory,” Lale Akoner, senior market strategist at BNY Mellon Investment Management, told Bloomberg Television. Reflation trading is coming back and the market is pricing in “a mid-cycle environment,” she said.

Questions continue to swirl about the sustainability of the stock market recovery. The Federal Reserve, in its semi-annual report on financial stability, said that “asset prices remain vulnerable to large declines if investor risk sentiment deteriorates, if progress in containing the virus is disappointing or if the economic recovery is stagnating ”.

Investors await the US inflation report on Wednesday. Payroll gains last week showed a jump in average hourly earnings.

Elsewhere, crude rose, but the rise was tempered by the possibility that the United States would take action to ease oil and gas prices. Gold was around the highest in two months. In cryptocurrencies, Bitcoin was trading around $ 66,200, not far from the all-time high set in October.

To watch this week:

  • Communist Party of China Central Decision-Making Committee meets until Thursday
  • Federal Reserve Bank of San Francisco President Mary Daly speaks on Tuesday
  • Global financing of China, money supply and new loans in yuan on Tuesday
  • China PPI Wednesday
  • Wholesale stocks in the United States, CPI, first jobless claims on Wednesday
  • The marked American bond is closed on Veterans Day on Thursday
  • China hosts its annual Singles Day, the world’s largest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure shoppers with bargains on Thursday

For more market analysis, read our MLIV blog.

Actions

  • The S&P 500 rose 0.1%
  • The Nasdaq 100 fell 0.1%
  • Nikkei 225 futures rose 0.5%
  • Australian S & P / ASX 200 index futures rose 0.1%
  • Hang Seng Index Futures Gain 0.6%

Currencies

  • The Japanese yen was at 113.23 per dollar
  • The offshore yuan was trading at 6.3883 per dollar
  • Bloomberg Dollar Spot index fell 0.2%
  • The euro was at $ 1.1587

Obligations

  • The yield on 10-year treasury bills rose four basis points to 1.49%

Merchandise

  • West Texas Intermediate crude rose 0.8% to $ 81.93 a barrel
  • Gold was at $ 1,824.27 an ounce

© 2021 Bloomberg LP


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