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Stocks hover near record as treasury yields drop: markets wrap

A gauge of the dollar dipped.
Image: Kiyoshi Ota/Bloomberg

Asian stocks traded in narrow ranges Wednesday as investors digested data on price pressures to gauge the outlook for stimulus amid the recovery from the pandemic. Ten-year US Treasury yields declined.

Shares slipped in Japan and edged up in China, where factory-gate inflation for May was at the highest since 2008 but consumer-price gains remained subdued. The nation is also considering imposing a cap on the price of thermal coal to contain high energy costs. European and US equity futures were little changed after the S&P 500 ended just shy of its May 7 record close.

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The focus remains on Thursday’s report about US consumer prices, which may affect views on the likely timeline for Federal Reserve discussions on tapering asset purchases. A gauge of the dollar dipped.

Oil resumed its rally to top $70 a barrel in New York. Bitcoin remains under pressure, trading around $33 000 after a retreat this week.

The debate over whether inflation will prove sticky and prompt central banks to pare support earlier than expected remains key for investors. While volatility is evident in the speculative fringe, such as meme shares and cryptocurrencies, global stocks are near an all-time high and Treasury yields have eased for three successive weeks. The overall picture suggests faith in the Fed’s assurances that price pressures will prove transient.

“Bond markets all over the world are saying that whatever happens in the headline inflation numbers, central banks are very comfortable that this inflation surge that we are seeing is going to be transitory,” Michael Jones, chief executive officer at Caravel Concepts, said on Bloomberg Television.

Here are key events to watch this week:

  • US consumer price index on Thursday.
  • Apple holds its annual Worldwide Developers Conference through June 11.
  • European Central Bank decision on Thursday and press conference with President Christine Lagarde.
  • Iran nuclear deal talks reconvene in Vienna Thursday.
  • Group of Seven leaders’ summit starts in Cornwall, England Friday.

These are some of the main moves in markets:

Stocks

  • S&P 500 futures were flat as of 6:55 a.m. in London. The index rose less than 0.1%
  • Nasdaq 100 futures were little changed. The gauge climbed less than 0.1%
  • Japan’s Topix index fell 0.2%
  • Australia’s S&P/ASX 200 index was down 0.2%
  • South Korea’s Kospi index fell 0.7%
  • Hong Kong’s Hang Seng Index shed 0.2%
  • China’s Shanghai Composite Index rose 0.2%
  • Euro Stoxx 50 futures added 0.1%

Currencies

  • The Japanese yen was at 109.49 per dollar
  • The offshore yuan was at 6.3952 per dollar
  • The Bloomberg Dollar Spot Index fell less than 0.1%
  • The euro traded at $1.2176

Bonds

  • The yield on 10-year Treasuries dipped to 1.52%
  • Australia’s 10-year bond yield fell more than three basis points to 1.58%

Commodities

  • West Texas Intermediate crude rose 0.3% to $70.35 a barrel
  • Gold was at $1 892.55 an ounce
© 2021 Bloomberg

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