(June 4): Asian stocks look set for a weaker open Friday after U.S. equities sagged amid robust economic data that stoked concerns about a pullback in central bank stimulus. Treasury yields and the dollar rose.
Futures slipped in Japan and Hong Kong and were steady in Australia. S&P 500 and Nasdaq 100 contracts edged down after the gauges fell overnight but came off lows on signs President Joe Biden may be willing to compromise on corporate taxes. Strong U.S. jobs data and record service-sector growth underscored the recovery from the pandemic.
The benchmark 10-year Treasury yield increased to 1.63% and the dollar jumped. That put gold under pressure, while the rally in crude oil stalled. Meme stocks including AMC Entertainment Holdings Inc. had another volatile session.
Traders will be monitoring the China open after Biden signed an order amending a ban on U.S. investment in Chinese companies. The order named 59 firms with ties to China’s military or in the surveillance industry, including Huawei Technologies Co.
Global stocks are trading in tight ranges as traders weigh the economic recovery as well as risks from faster inflation. The monthly U.S. payrolls report Friday could be a source of volatility if the data deliver a surprise. St. Louis Fed President James Bullard said the labor market might be tighter than the current unemployment rate suggests.
“With seemingly all systems go on the jobs front, the economy is flashing some very real signs that this isn’t just a comeback — expansion mode could be on the horizon,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “So what does that translate to? Likely more pressure on the Fed to make a move — perhaps sooner than many thought from the outset.”
These are some of the main moves in markets:
Stocks
S&P 500 futures fell less than 0.1% as of 7:45 a.m. in Tokyo. The index shed 0.4%
Nasdaq 100 contracts declined 0.1. The gauge dropped 1.1%
Nikkei 225 futures slipped 0.4%
Australia’s S&P/ASX 200 Index futures were steady
Hang Seng Index futures fell 0.2%
Currencies
The Bloomberg Dollar Spot Index was stable after rising 0.7%
The euro was at US$1.2129
The Japanese yen traded at 110.31 per dollar
The offshore yuan was at 6.3994 per dollar
Bonds
The yield on 10-year Treasuries climbed four basis points to 1.63%
Commodities
West Texas Intermediate crude was at US$68.83 a barrel
Gold was at US$1,871.36 an ounce after falling almost 2%.-BLOOMBERG