Asian Stocks Look Set for Gains; Dollar Declines: Markets Wrap

Asian stocks looked set to climb after a technology-fueled rally lifted their U.S. counterparts to the highest since February. The dollar weakened to an almost six-week low.

Futures indicated a firmer open in Japan, Australia and Hong Kong. S&P 500 contracts were little changed in Asia after the benchmark turned positive for the year, with Monday’s rally taking it to levels last seen just as the pandemic was starting. The Nasdaq 100 jumped the most since April, hitting a record high, after Amazon.com and Zoom Technologies soared on demand for companies that benefit from diminished economic activity. Treasuries pushed higher.

Investors are keeping an eye on Washington, where lawmakers are starting to hammer out a rescue package to replace some of the expiring benefits earlier versions contained. Euro-area leaders appeared close to an agreement on stimulus — while the total size of the recovery package is in flux, an earlier proposal was for 750 billion euros ($858 billion).

“The economic dislocation of Covid-19 triggered a tremendous response by fiscal and monetary policy makers as well as central banks,” said Gene Tannuzzo, a portfolio manager at Columbia Threadneedle. “These measures helped to stabilize markets, yet we still find ourselves in an environment of continuous low growth.”

On the virus front, AstraZeneca jumped to a record after results from a vaccine trial were published, but the rally faded after analysts said the data, while good, weren’t as stellar as hoped for. California, Florida and Arizona all reported a slowdown in the increase of new cases.

Elsewhere, Italy’s 10-year bond yield spread over Germany, a key gauge of risk in the euro region, fell to the lowest level since March. Oil climbed above $40 a barrel.

Here are some key events coming up:

  • Quarterly earnings gather steam, including Blackstone Group, Microsoft, Roche, Intel, Unilever, Canadian Pacific, UBS, Tokyo Steel, Daimler, Hyundai and Mattel.
  • The EIA crude oil inventory report is due Wednesday.
  • U.S. weekly jobless claims come on Thursday.

These are the main moves in markets:

Stocks

  • S&P 500 futures were flat as of 7:01 a.m. in Tokyo. The S&P 500 Index gained 0.8%.
  • Nikkei 225 futures rose 0.7%.
  • Australia’s S&P/ASX 200 Index futures rose 0.8%.
  • Hong Kong’s Hang Seng Index futures gained 0.9%.

Currencies

  • The yen was trading at 107.25 per dollar.
  • The offshore yuan was at 6.9871 per dollar.
  • The euro traded at $1.1444.
  • The Bloomberg Dollar Spot Index declined 0.2%.

Bonds

  • The yield on 10-year Treasuries fell more than one basis point to 0.61%.

Commodities

  • West Texas Intermediate crude fell 0.4% to $40.64 a barrel.
  • Gold was at $1,817.77 an ounce, near the highest in nine years.

— With assistance by Anchalee Worrachate, and Vildana Hajric

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