- Asian stocks are set to track a U.S. rally as a focus on corporate earnings helps to ease some of the concerns over inflationary pressures in the global economy. A gauge of the dollar retreated.
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Futures advanced in Japan, Australia and Hong Kong, while U.S. contracts were steady. The S&P 500 is close to a record as traders digest company reports to assess the impact of supply chain snarls and higher commodity prices. The 10-year Treasury yield pushed above 1.6% and the yield curve steepened. The dollar weakened amid bets that other central banks will boost interest rates before the Federal Reserve. The offshore yuan jumped.
Bitcoin is close to scaling the peak it reached in April. The second-most heavily traded exchange traded fund listed in the U.S. debuted as the first Bitcoin-linked fund on record in a watershed moment for the cryptocurrency industry.
The earnings season has taken the edge off concerns about slowing growth, price pressures stoked by an energy crisis and the prospect of reduced central bank support. The Cboe Volatility Index has fallen back to the lowest level since August.
This earnings season could be highly important for investors, as inflation, labor, supply, and currency risks settle in, said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. We will be particularly attuned to companies guidance on the path ahead and whether higher costs could reduce corporate margins. In the latest Fed comments, Governor Christopher Waller said the central bank should begin tapering its bond buying program next month, though interest-rate increases are probably still some time off. He added the caveat that if my upside risk for inflation comes to pass, with inflation considerably above 2% well into 2022, then I will favor liftoff sooner than I now anticipate. The focus in China remains on Beijing s regulatory curbs and the slowdown in the property sector amid the debt woes at China Evergrande Group. China sold a U.S. dollar bond in Hong Kong for the fifth straight year.
Elsewhere, crude oil traded around $83 a barrel in New York and Brent closed above $85 a barrel for the first time since October 2018. Russia signaled it would not give Europe extra natural gas without approval for the Nord Stream 2 pipeline.
For more market analysis, read our MLIV blog.
None Earnings roll in, including from AT&T Inc. Barclays Plc and Tesla Inc.
Some of the main moves in markets:
None of the S&P 500 futures rose 0.1% as of 7: 01 a.m. in Tokyo. The S&P 500 rose 0.7%.
None Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.7%.
None The Japanese yen was little changed at 114.39 per dollar.
None The offshore yuan was at 6.3751 per dollar.
None The yield on 10 year Treasuries advanced four basis points to 1.64% to yield -
None Gold was at $1,769. 78 an ounce.
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