(March 31): Most Asian stocks look set to climb on the last trading day of the quarter as investors anticipate more U.S. stimulus, while wary of upward pressure on bond yields. Rates on the U.S. 10-year benchmark touched a 14-month high.
Futures rose in Australia and Hong Kong. Contracts dipped in Japan where the country’s biggest bank joined a growing list of global financial firms to take a hit from the forced unwind of positions by Bill Hwang’s Archegos Capital Management. U.S. equity futures were little changed. Earlier, the S&P 500 Index closed lower despite a rally in U.S. bank shares, due to weakness in the utilities and consumer staples sectors.
The dollar strengthened for a second day and gold slipped below US$1,700 per ounce to multi-month lows. Oil halted a two-day advance before the April 1 meeting of OPEC and its allies. Ten-year Treasury yields jolted as high as 1.77% before subsiding.
Investors are watching the course of the U.S. growth rebound and its possible impact on inflation, amid concerns that a renewed rise in bond yields could hit stocks as they approach fresh record highs. President Joe Biden is poised to unveil a large infrastructure package, and key jobs data are due Friday. The International Monetary Fund will upgrade its forecast for global economic growth next week.
“We believe that the equity market rally and cyclical rotation have room to run as improving economic expectations make their way to reality via earnings growth,” Lauren Goodwin, portfolio strategist at New York Life Investments, said in a note.
Elsewhere, ViacomCBS and Discovery shares rose, while the American depositary receipts of Chinese companies linked to the Archegos block trades also posted gains.
Bitcoin got a bump up after PayPal Holdings Inc. announced a new service for buying with cryptocurrencies.
Some key events to watch this week:
President Biden is expected to unveil his infrastructure program Wednesday.
EIA crude inventory report Wednesday.
OPEC+ meets to discuss production levels for May on Thursday.
China Caixin PMI due Thursday.
U.S. employment report for March on Friday.
Good Friday starts the Easter weekend in countries including the U.S., U.K., France, Germany, Australia and Canada.
Stocks
S&P 500 futures slipped 0.1% as of 7:08 a.m. in Tokyo. The S&P 500 Index dipped 0.3%.
Nikkei 225 futures dipped 0.4%.
Australia’s S&P/ASX 200 Index futures rose 0.8%.
Hong Kong’s Hang Seng Index futures rose 0.4% earlier.
Currencies
The yen was at 110.36 per dollar, the weakest in about a year.
The offshore yuan was at 6.5746 per dollar.
The Bloomberg Dollar Spot Index rose 0.4%.
The euro traded at US$1.1718.
Bonds
The yield on 10-year Treasuries eased to 1.70% after touching 1.77%.
Australia’s 10-year bond yield was steady at 1.78%.
Commodities
West Texas Intermediate crude decreased 0.3% to US$60.37 a barrel.
Gold was at US$1,684.94, near the weakest since April 2020.- The Edge Market-Bloomberg