Asian stocks set for steady open; US dollar, bonds dip

June 18, 2021 editor

(June 8): Asian stocks are poised for a steady start Tuesday as investors await more clues on the outlook for inflation and central bank stimulus amid the recovery from the pandemic. The dollar and Treasuries slipped.

Futures rose in Japan, Australia and Hong Kong. U.S. stocks were little changed in sight of a record, while a biotech jump following approval of a Biogen Inc. Alzheimer’s drug bolstered the Nasdaq 100. S&P 500 contracts were little changed and futures on the tech-heavy gauge edged up, weathering an international plan to ensure big firms such as Amazon.com Inc. pay a minimum level of tax.

The dollar dipped and 10-year U.S. Treasury yields climbed. Traders are awaiting the U.S. inflation report this week to gauge price pressures amid expectations that the Federal Reserve in the weeks ahead will begin discussions on tapering its asset purchases.

Global equities are hovering at a record and cross-asset volatility has ebbed, underpinned by the economic reopening from the health crisis and central bank support. But there are concerns about how long the calm can last given that policy makers will eventually pare back stimulus as the recovery builds. Thursday’s U.S. CPI report will be one of the last major economic indicators before the Fed’s rate decision later this month.

“When the FOMC will begin tapering its asset purchase program is still front and center for market participants,” Kim Mundy, a currency strategist at the Commonwealth Bank of Australia, said in a note. It’s possible investors will reconsider that timeline following the inflation print, said Mundy, who expects the Fed to discuss tapering in July or September.

Elsewhere, oil held a decline, losing some momentum after hitting US$70 a barrel in New York for the first time in over two years.

Here are key events to watch this week:

Apple holds its annual Worldwide Developers Conference (WWDC) virtually for a second year, to announce new hardware and software and work with developers. Through June 11.
European Central Bank decision on Thursday and press conference with President Christine Lagarde.
Iran nuclear deal talks reconvene in Vienna Thursday.
U.S. consumer price index on Thursday.
Group of Seven leaders’ summit starts in Cornwall, England Friday.

These are some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 7:25 a.m. in Tokyo. The S&P 500 was little changed
Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 0.2%
Nikkei 225 futures rose 0.5%
Australia’s S&P/ASX 200 Index futures rose 0.1%
Hang Seng Index futures rose 0.1%

Currencies