(March 26): Asian stocks looked set to follow their U.S. peers higher amid progress on vaccine distribution and an end to some restrictions for banks. Oil reversed its rally.
Australian shares opened higher and futures rose in Japan and Hong Kong. U.S. contracts edged up after modest gains in the S&P 500 Index, as President Joe Biden doubled his target for administering Covid-19 vaccines. An index of small-cap shares rose more than 2% following three days of losses. Bank stocks gained in after-hours trading after the Federal Reserve said firms that clear stress tests can raise dividends after June 30. Nasdaq 100 contracts pointed higher after the gauge slipped overnight.
U.S. 10-year yields rose slightly, to 1.63%, after another lackluster auction of seven-year notes. The reaction was muted compared with the upheaval in bonds and interest-rate sensitive stocks following poor demand at last month’s sale. The dollar is headed for a weekly gain.
West Texas Intermediate crude erased the week’s gains to trade below US$60 a barrel, dropping as a strengthening dollar and mounting lockdowns in Europe blunted the potential impact of crude cargoes backing up outside the blocked Suez Canal.
Global equities remain just under record highs as investors assess progress in the fight against Covid-19 and mull the risks of inflation from heavy stimulus. The U.S. recovery looks on track with latest data showing a bigger-than-forecast drop in weekly jobless claims. Traders are also weighing U.S.-China tensions, as President Biden highlighted the rivalry between the two largest economies and declined to comment on whether import tariffs would remain in place.
“The markets are stuck in a lull where they are still taking some direction from the move in interest rates,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “At this point we’re trying to get some more news globally that will be the next catalyst.”
Elsewhere, Bitcoin slumped below US$52,000. U.S. personal income and spending data on Friday are the next key numbers to watch.
These are some of the main moves in financial markets:
Stocks
S&P 500 futures rose 0.2% as of 9 a.m. in Tokyo, after the index rose 0.5%.
Nasdaq 100 futures gained 0.3% after the index dipped 0.1%.
Australia’s S&P/ASX 200 Index rose 0.5%.
Nikkei 225 futures climbed 1%.
Hang Seng Index futures rose 0.4%.
Currencies
The Bloomberg Dollar Spot Index was steady.
The euro was up 0.1% at US$1.1776.
The British pound was 0.1% higher at $1.3747.
The Japanese yen traded at 109.18 per dollar.
Bonds
The yield on 10-year Treasuries fell about one basis point to 1.62%.
Australia’s 10-year yield was little changed at 1.67%.
Commodities
West Texas Intermediate crude gained 0.3% to US$58.76 a barrel.
Gold was steady at US$1,728.21 an ounce.- Bloomberg-The Edge Market