(June 2): Asian stocks look set for a steady open Wednesday after U.S. equities inched lower as the tussle between economic optimism and inflation concern continues to play out in markets. Treasury yields edged up.
Futures rose modestly in Japan and Australia but dipped in Hong Kong. The S&P 500 and Nasdaq 100 closed with small losses after U.S. manufacturing data topped estimates but also signaled supply shortages and labor constraints. U.S. equity contracts slipped.
Oil rose to a more than two-year peak, with the OPEC+ alliance forecasting a tightening global crude market and a nuclear deal with Iran still up in the air.
The dollar was steady in early Asian trading. The lira fell to another record low against the greenback after Turkey’s President Recep Tayyip Erdogan renewed calls for lower interest rates. The offshore yuan was little changed amid a push by the People’s Bank of China to temper its appreciation.
Global stocks are looking for fresh catalysts as they hover at record highs. Concerns linger that the recovery from the pandemic will stoke inflation and prompt central banks to pare back policy support earlier than anticipated. Traders await key U.S. payrolls data Friday for a steer on the outlook.
“Investors would see a surge in payrolls growth as a sign that the Fed is more likely to move,” said Lauren Goodwin, portfolio strategist at New York Life Investments.
Federal Reserve Governor Lael Brainard said there are risks on both sides of monetary policy as the U.S. economy surges ahead while millions of people are unemployed.
Here are key events to watch this week:
Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan speak Wednesday U.S. employment report for May on Friday
These are some of the main moves in markets:
Stocks
S&P 500 futures slipped 0.1%. The index fell less than 0.1%
Nasdaq 100 contracts dipped 0.1%. The gauge fell 0.2%
Nikkei 225 futures rose 0.1%
S&P/ASX 200 Index future rose 0.2%
Hang Seng Index futures fell 0.2%
Currencies
The Japanese yen was little changed at 109.47 per dollar
The offshore yuan traded at 6.3830 per dollar
The Bloomberg Dollar Spot Index was flat
The euro was little changed at US$1.2213
Bonds
The yield on 10-year Treasuries advanced one basis point to 1.61%
Commodities
West Texas Intermediate crude rose 0.2% to US$67.87 a barrel
Gold was at US$1,898.75 an ounce-BLOOMBERG