Asia Stocks, U.S. Futures Climb; Yields Steady: Markets Wrap

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Asia stocks and U.S. futures edged higher Monday as investors weighed an unexpectedly strong U.S. jobs report and the muted reaction in bond yields.

A regional gauge rose and Japan gained, while markets were closed for holidays in China, Hong Kong and Australia. S&P 500 futures extended gains from Friday on a payrolls report showing U.S. employers added the most jobs in seven months. The benchmark 10-year Treasury yield was relatively steady at 1.72%.

Oil slipped after OPEC+ leaders decided to boost production and Saudi Arabia raised prices for shipments to Asia. The U.S. dollar was little changed against major currencies.

The U.S. Treasury curve is hovering around its steepest since 2015

Investors are watching the progress of debate over U.S. President Joe Biden’s $2.25 trillion infrastructure proposal, as Republicans expressed guarded support for a more limited plan. The response so far in bond markets has been muted, with inflation concerns easing amid doubts over the viability of more-generous spending, even as central banks remain committed to keeping interest rates lower for longer.

“The repricing of inflation risk and U.S. rates, which will impact discount rates of future earnings and the way stocks are being valued is a source of uncertainty,” said Johanna Chua, chief economist for Citigroup Global Markets. “The other uncertainty is the pace of the vaccinations and the virus.”

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China is ramping up its Covid-19 vaccination push, aiming to be twice as fast as the U.S., and a leader of the World Health Organization’s program said the rollout of shots will be expanded to 100 countries in the next couple of weeks, from 84 at present. Meanwhile, authorities in India’s financial hub asked private offices to work from home as Mumbai again became a viral epicenter.

Some key events to watch this week:

  • The Reserve Bank of Australia delivers its policy decision Tuesday.
  • U.S. Federal Reserve publishes minutes from its March meeting on Wednesday.
  • Japan publishes its balance of payments numbers Thursday.
  • China’s consumer and producer prices data are due Friday.
  • Fed Chairman Jerome Powell takes part in an IMF panel on the global economy Friday.

These are some of the main moves in financial markets:


Stocks

  • S&P 500 futures were up 0.4% as of 12:00 p.m. Tokyo time. They rose 0.4% Friday.
  • Japan’s Topix Index edged up 0.6%.
  • Korea’s Kospi Index was down 0.1%.

Currencies

  • The Bloomberg Dollar Spot Index was up 0.1%.
  • The yen was up 0.1% at 110.58 per dollar.
  • The euro was 0.1% higher at $1.1766.
  • The Australian dollar was up 0.1% at 76.21 U.S. cents

Bonds

  • The yield on the 10-year Treasury note was steady around 1.72%.

Commodities

  • West Texas Intermediate crude fell 0.6% to $61.10 a barrel.
  • Gold edged down 0.2% to $1,725 an ounce.