Asian Stocks Set for Steady Open on Growth Caution: Markets Wrap

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(Bloomberg) — Asian stocks looked set for a steady start Friday after a bout of weakness in global shares due to a slowdown in the pandemic recovery and the prospect of reduced central bank stimulus.

Equity futures for Japan, Australia and Hong Kong pointed to modest gains. U.S. contracts fluctuated after the S&P 500 dropped for a fourth session, the longest losing streak since June, and the tech-heavy Nasdaq 100 retreated. Reports showed a decline in U.S. jobless claims but also more disruption from the delta virus variant, including Microsoft Corp.’s move to scrap plans to fully reopen its offices. 

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Treasuries climbed amid the mood of caution and strong demand at a 30-year bond auction. A gauge of the dollar fell. In commodities, oil slid after China decided to tap crude reserves to ease a surge in energy costs.

Chinese technology stocks listed in the U.S. edged lower after a bruising tumble in Asia. Beijing’s crackdown on a range of private industries as well as possible steps to cushion the second-largest economy remain in focus for traders.

Investors have become wary of a backdrop of elevated inflation and slower economic reopening alongside looming reductions in central bank support. The European Central Bank said it will slow the pace of its pandemic bond-buying in the final quarter of 2021, but President Christine Lagarde added that didn’t herald a winding down in stimulus with the delta strain still posing risks.

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There’s “a general feeling in the market that growth is slowing down in the U.S.,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “There’s concern that what’s happening with the delta variant is impacting consumer behavior, potentially business behavior,” he said.

President Joe Biden said he’ll order all executive branch employees, federal contractors and millions of health-care workers to be vaccinated against the coronavirus. His administration will also issue rules requiring large private employers to mandate shots or testing.

What to watch this week:

U.S. President Joe Biden may make his choice this week on whether to renominate Fed Chair Jerome Powell to a second term

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For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

S&P 500 futures were steady as of of 7:01 a.m. in Tokyo. The S&P 500 fell 0.5%Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.4%Nikkei 225 futures were up 0.2%S&P/ASX 200 futures rose 0.3%Hang Seng futures climbed 0.6%

Currencies

The Bloomberg Dollar Spot Index fell 0.2%The euro was at $1.1825The offshore yuan was at 6.4493 per dollarThe Japanese yen was at 109.74 per dollar

Bonds

The yield on 10-year Treasuries declined four basis points to 1.30%

Commodities

West Texas Intermediate crude was at $67.94 a barrel, down 0.3%Gold was at $1,794.11 an ounce

©2021 Bloomberg L.P.

Bloomberg.com

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