Asia Stocks Open Steady; Treasuries Hold Drop: Markets Wrap

(Bloomberg) — Asia stocks fluctuated at the open Monday with investors weighing the pace of economic recovery against more potent Covid-19 strains and central banks mulling stimulus reductions. The dollar and Treasuries were steady.

Japan’s benchmark ticked higher, while South Korea was little changed. Australia dipped amid stricter curbs to stem the spread of the more potent Delta Covid-19 variant. U.S. futures edged up. The S&P 500 had its best week since February, with financial and retail shares beating the technology giants that outperformed at the height of the pandemic.

Cryptocurrencies will be closely watched after the U.K. restricted an affiliate of crypto exchange Binance from doing business in the country. Bitcoin rose for a second day, trading in the mid-$30,000s range in the Asian morning on Monday.

Global stocks are trading near a record high as anxiety about the Federal Reserve’s hawkish tilt eased, with investors dialing back concerns that U.S. policy makers will rush to boost interest rates despite mounting inflation pressures. Volatility receded, with the Cboe Volatility Index, or the VIX, sinking to pre-pandemic levels. Still, markets remain sensitive to more central banks debating the withdrawal of emergency stimulus.

The Fed “are far away from tapering, they are far away from increasing rates, but at some point, if the markets sees the Fed being too far behind the curve you will start to see some adjustment on the long end of the curve,” Charles-Henry Monchau, chief investment officer at FlowBank SA, said on Bloomberg TV. “We might not have seen the peak in bond yields. I would not be surprised to see some adjustments in the coming months. That might be an excuse for the market to take a bit of profit.”

Read: Peak Central Bank Support Marks New Phase for World Recovery

Here are some events to watch in the markets this week:

Reserve Bank of Australia Governor Philip Lowe addresses a banking summit in Sydney TuesdayOECD meets in Paris to finalize a proposal to overhaul global minimum corporate taxation WednesdayChina’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party ThursdayOPEC+ ministerial meeting ThursdayECB President Christine Lagarde speaks FridayThe U.S. jobs report is forecast to show an acceleration in payrolls growth in June Friday

For more market commentary, follow the MLIV blog.

These are some of the main moves in markets:

Stocks

S&P 500 futures rose 0.1% as of 9:28 a.m. in Tokyo. The S&P 500 rose 0.3% FridayNasdaq 100 was little changed. The Nasdaq 100 fell less than 0.1%Topix index rose 0.2%Australia’s S&P/ASX 200 Index fell 0.2%Kospi index was little changedHang Seng Index futures rose 0.1% earlier

Currencies

The yen was little changed at 110.78 per dollarThe offshore yuan was at 6.4606 per dollarThe Bloomberg Dollar Spot Index was little changedThe euro was at $1.1935

Bonds

The yield on 10-year Treasuries was at 1.53%Australia’s 10-year bond yield added three basis points to 1.60%

Commodities

West Texas Intermediate crude rose 0.2% to $74.19 a barrelGold gained 0.2% to $1,781 an ounce

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