A number of Asian stock markets edged back Tuesday as investors await more clues on whether the recovery from the pandemic will stoke price pressures and imperil loose monetary policy. The dollar rose.
Shares from Japan to China pared or reversed gains. US futures gave back earlier advances, leaving S&P 500 contracts flat and those on the Nasdaq 100 slightly higher. The S&P 500 was steady near a record overnight, while a rally in Biogen Inc. on approval of its Alzheimer’s drug lifted the Nasdaq 100.
Ten-year US Treasury yields dipped. Traders are awaiting the US inflation report to assess price pressures and expectations that the Federal Reserve is getting closer to starting discussions about tapering asset purchases.
Oil extended a decline, losing some momentum after hitting $70 a barrel in New York for the first time in over two years. Digital tokens including Bitcoin retreated, with the Bloomberg Galaxy Crypto Index shedding as much as 10%.
Global equities continue to hover around all-time highs and cross-asset volatility has ebbed, underpinned by the economic reopening from the health crisis and central bank support. But there are concerns about how long the calm can last given that policy makers will eventually pare back stimulus as the recovery builds. Thursday’s US CPI report will be one of the last major economic indicators before the Fed’s rate decision later this month.
“We advocate looking through near term market volatility and remain pro-risk, predicated on our belief that the Fed faces a very high bar to change its easy monetary policy stance,” BlackRock Investment Institute strategists led by Elga Bartsch wrote in a note.
For market commentary, follow the MLIV blog.
Here are key events to watch this week:
- 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.
- US consumer price index on Thursday.
- Group of Seven leaders’ summit starts in Cornwall, England Friday.
These are some of the main moves in markets:
- S&P 500 futures were flat as of 7:15 a.m. in London. The S&P 500 was little changed
- Nasdaq 100 futures rose 0.2%. The index added 0.2%
- Japan’s Topix index rose 0.1%
- Australia’s S&P/ASX 200 index added 0.2%
- South Korea’s Kospi index shed 0.2%
- Hong Kong’s Hang Seng index lost 0.3%
- China’s Shanghai Composite index dipped 0.7%
- Euro Stoxx 50 futures were little changed
- The Japanese yen traded at 109.44 per dollar, down 0.2%
- The offshore yuan was at 6.3889 per dollar
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was at $1.2179, down 0.1%
- The yield on 10-year Treasuries dipped about one basis point to 1.56%
- Australia’s 10-year bond yield fell two basis points to 1.62%
- West Texas Intermediate crude fell 0.6% to $68.79 a barrel
- Gold was at $1 896.52 an ounce, down 0.1%