Global Markets: Asia stocks edge up on positive US economic data
Shares edged up in Japan, South Korea and Australia. US contracts were in the green after rallies in US benchmarks overnight, which included a fresh record for the Dow Jones Industrial Average
Asian stocks opened slightly higher after U.S. indexes gained on positive economic data. The dollar held losses.
Shares edged up in Japan, South Korea and Australia. U.S. contracts were in the green after rallies in U.S. benchmarks overnight, which included a fresh record for the Dow Jones Industrial Average. Treasuries held steady, with the 10-year yield hovering at 1.57%, well below recent highs.
Investors will be watching for weakness at China’s open, after Bloomberg News reported the Biden administration is likely to preserve limits on U.S. investments in certain Chinese companies.
U.S. economic reports helped sentiment, as applications for state unemployment insurance fell to a fresh pandemic low, and separate data showed a rebound in productivity. Traders now turn to Friday’s payrolls numbers.
“With jobless claims hitting a pandemic-era low, anticipation for the full jobs picture tomorrow mounts," said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “Today’s read is another proof point that we’re one step closer to full economic recovery. As we see some serious momentum building on the jobs front, all eyes will be on how this plays into action taken by the Fed."
While strengthening growth in the world’s largest economy is supporting markets, investors are concerned that a faster-than-expected rebound on unprecedented government and central bank stimulus could drive excessive inflation. The Federal Reserve remains committed to near-zero interest rates to bring about a full recovery, though an announcement of a pullback in its heavy monthly bond purchases seems increasingly likely in the second half of this year.
Concerns about excessive risk taking could spur more talk of the Fed adjusting policy. The central bank’s semi-annual financial stability report noted rising appetite for risk across a variety of asset markets is stretching valuations and creating vulnerabilities in the U.S. financial system.
Elsewhere, spot iron ore broke $200 a ton for the first time, while copper approached a record high. Oil climbed.
These are some of the main moves in markets:
Stocks
- S&P 500 futures were little changed at 9:35 a.m. in Tokyo, after the index rose 0.8%
- Nasdaq 100 contracts rose 0.3%. The index gained 0.8%.
- Japan’s Topix Index climbed 0.3%
- South Korea’s Kospi was up 0.2%
- Australia’s S&P/ASX 200 Index rose 0.2%
- Hong Kong’s Hang Seng Index futures slipped 0.4% earlier
Currencies
- The Bloomberg Dollar Spot Index was steady
- The euro traded at $1.2067
- The British pound was $1.3895
- The Japanese yen was 109.02 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.57%
- Australia’s 10-year yield rose one basis point to 1.69%
Commodities
- West Texas Intermediate crude traded just below $65 a barrel
- Gold futures traded at $1,815 an ounce
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