(Bloomberg) — Asian stocks looked set for a mixed start Monday as traders weighed elevated inflation and awaited earnings from major U.S. technology companies. Turkey’s lira fell to a record low amid a diplomatic spat.
Futures for Japan and Hong Kong fell, while Australia’s rose. U.S. equities and 10-year U.S. Treasury yields declined on Friday. Federal Reserve Chair Jerome Powell on Friday flagged inflation could stay higher for longer, making clear the central bank will begin tapering its bond purchases shortly but stay patient on raising interest rates.
The lira slid after President Recep Tayyip Erdogan’s weekend threats to expel ambassadors of 10 foreign countries, including those of the U.S. and Germany. The dollar was steady against major peers in early Asian trading.
Traders are monitoring an outbreak of the delta virus variant in China that is expected to worsen, as well as the wider economic challenges from a property-sector slowdown and regulatory curbs. Meanwhile, in the U.S. the five largest technology companies are set to report earnings, testing the argument that the sector is a font of dependable revenue and profit growth.
Global stocks have remained resilient in the face of risks from price pressures stoked by supply-chain bottlenecks and higher energy costs. But investors remain wary that volatility could pick up as central banks start tightening monetary policy to keep inflation in check.
“While the risk of a correction for shares remains — with issues around inflation and China’s slowdown likely to linger for a while — they seem to be climbing the proverbial wall of worry,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, wrote in a note.
Elsewhere, the European Central Bank’s meeting this week will be closely watched for guidance on its pandemic bond-buying program.
Crude oil gained for a ninth consecutive week. Saudi Arabia said oil producers shouldn’t take the rise in prices for granted because the coronavirus pandemic could still hit demand. Bitcoin was trading around $61,000.
Here are some events to watch this week:
- Earnings: Amazon, Apple, Facebook, Microsoft, Twitter, Samsung Electronics, HSBC Holdings, China Vanke, PetroChina, Ping An Insurance Group
- Australia CPI, Wednesday
- U.S. wholesale inventories, U.S. durable goods, Wednesday
- Bank of Japan monetary policy decision, briefing, Thursday
- ECB rates decision, President Christine Lagarde briefing, Thursday
- U.S. GDP, initial jobless claims, Thursday
- G-20 joint finance and health ministers meeting ahead of the weekend leaders’ summit, Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
- The S&P 500 fell 0.1%
- The Nasdaq 100 fell 0.9%
- Nikkei 225 futures fell 0.7%
- Australia’s S&P/ASX 200 Index futures rose 0.4%
- Hang Seng Index futures fell 0.4% earlier
- The Japanese yen traded at 113.56 per dollar
- The offshore yuan traded at 6.3826 per dollar
- The Bloomberg Dollar Spot Index fell 0.2% Friday
- The euro was at $1.1641
- The yield on 10-year Treasuries declined seven basis points to 1.63% Friday
- West Texas Intermediate crude rose 1.5% to $83.76 a barrel Friday
- Gold was at $1,792.65 an ounce
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