Asian stocks were flat on Thursday and US equity futures rose after the S&P 500 set another record high thanks to new evidence of the Federal Reserve’s commitment to a supportive policy.
Japanese stocks slipped amid concerns Tokyo expectstougher measures to curb the rise in viral infections, while Australia and Hong Kong outperformed. US and European equity futures rallied on modest gains in the S&P 500 against a backdrop of declining volume on US exchanges. Tech giants including Apple Inc. helped push the Nasdaq 100 up. The dollar was heading for its fifth decline in six sessions, as Treasuries stabilized.
The British pound broke two days of losses after coming under pressure over vaccine concerns from AstraZeneca Plc, on which the UK is heavily dependent. Growing fears that the vaccine will cause rare blood clots could also hamper vaccination campaigns elsewhere in the world.
Fed officialswere united on the need to see more progress on the recovery before scaling back their massive bond-buying program, according to minutes from last month’s meeting released on Wednesday. Policymakers downplayed inflation risks, saying the recent surge in treasury bond yields reflects better growth prospects. Traders have downgraded their most aggressive stance so that interest rates will start rising by the end of next year.
Turbulence is expected to return to the market in the second quarter, Banny Lam, head of research for CEB International Investment Corp., told Bloomberg TV. Along with the emphasis on inflationary pressures, “we should put more emphasis on the theme of renewed economic growth.”
Meanwhile, Treasury Secretary Janet Yellenunveiled details of a plan to bring roughly $ 2 trillion in corporate profits into the U.S. tax net. This would help fund government spending initiatives, potentially reducing reliance on more borrowing, which could push rates up.
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Some key events to watch this week:
- The spring 2021 meetings of the IMF and the World Bank Group are taking place virtually. Federal Reserve Chairman Jerome Powell is taking part in a panel on the global economy on Thursday.
- Japan releases its balance of payments figures on Thursday.
- Data on consumer and producer prices in China are due on Friday.
Here are some of the main movements in the markets:
Stocks
- Futures on S&P 500 were up 0.5% at 7 a.m. in London. The S&P 500 gained 0.2%.
- Japan’s Topix index fell 0.8%.
- South Korea’s Kospi index fell 0.1%.
- The Australian S & P / ASX 200 index rose 1%.
- Hong Kong’s Hang Seng Index climbed 1.1%.
- The Shanghai Composite Index in China rose 0.3%.
- Euro Stoxx 50 futures rose 0.4%.
Currencies
- The yen rose 0.2% to 109.68 per dollar.
- The offshore yuan was at 6.5539 to the dollar.
- The Bloomberg Dollar Spot Index plunged 0.1%.
- The euro was little changed at $ 1.1871.
Obligations
- The yield on 10-year Treasury bills fell 1.66%.
- The yield on Australian 10-year bonds slipped one basis point to 1.74%.
Basic products
- West Texas Intermediate crude fell 0.8% to $ 59.31 a barrel.
- Gold rose 0.3% to $ 1,742.05 an ounce.
– With the help of Rita Nazareth, Claire Ballentine and Joanna Ossinger
