Asian stocks opened steady Monday and U.S. equity futures dipped as traders digested a record close on Wall Street as well as a $20 billion wave of block trades that rattled investors.
Japanese shares climbed, while Australia and South Korea were little changed. U.S. contracts fell after the S&P 500 notched a record Friday. The U.S. open later is now much anticipated, after revelations that Archegos Capital Management LLC — the family office of Bill Hwang — was behind the block trades, dumping shares of Chinese tech giants and U.S. media conglomerates amid margin calls.
Nomura Holdings Inc. shares slumped more than 11% after the company warned of a possible “significant” loss arising from transactions with a U.S. client.
Traders will also be monitoring China’s daily yuan fixing, after a bout of sudden weakness in the currency. A dollar gauge ticked higher. Ten-year U.S. Treasury yields climbed at the end of last week.
“Shares remain at risk of further volatility from rising bond yields,” Diana Mousina, senior economist at AMP Capital Investors Ltd., wrote in a note. “But looking through the inevitable short-term noise, the combination of improving global growth helped by more stimulus, vaccines, negative real yields and still low interest rates augurs well for growth assets generally in 2021.”
The strength of the recovery, aided by the vaccine rollout, and inflation risks are front of mind for investors. Later this week, U.S. President Joe Biden plans to unveil a further stimulus program with a tilt toward infrastructure. U.S.-China ties are also in focus, after a report that Washington isn’t ready to lift tariffs on Chinese imports in the near future, but may be open to trade talks.
Oil was steady around $61 a barrel as traders weighed the impact of renewed lockdowns and prepared for an OPEC+ production-setting meeting later in the week. In Egypt, the Suez Canal remains blocked by a massive container ship despite frantic efforts to free it.
Some key events to watch this week:
• China manufacturing PMI due Tuesday.
• President Biden is expected to unveil his infrastructure program Wednesday.
• EIA crude inventory report Wednesday.
• OPEC+ meets to discuss production levels for May on Thursday.
• China Caixin PMI due Thursday.
• U.S. employment report for March on Friday.
• Good Friday starts Easter weekend in countries including the U.S., U.K., France, Germany, Australia and Canada.
These are some of the main moves in financial markets:
• S&P 500 futures slipped 0.4% as of 9:08 a.m. in Tokyo. The S&P 500 Index climbed 1.7% Friday.
• Topix Index rose 0.6%.
• Australia’s S&P/ASX 200 Index added 0.2%.
• Kospi Index fell 0.1%.
• The yen was at 109.70 per dollar, down 0.1%.
• The offshore yuan was at 6.5432 per dollar.
• The Bloomberg Dollar Spot Index edged up 0.1%.
• The euro traded at $1.1787.
• The yield on 10-year Treasuries dipped to 1.67%.
• Australia’s 10-year bond yield climbed about four basis points to 1.70%.
• West Texas Intermediate crude was little changed at $60.99 a barrel.
• Gold was at $1,731.21 an ounce.
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