(Bloomberg) — Stocks in Asia started the week little changed with some major markets shut and inflation concerns resurfacing. U.S. futures edged higher.
Benchmarks fluctuated in Australia and South Korea, and markets are closed in Japan and China for holidays. S&P 500 and Nasdaq 100 contracts climbed. U.S. stocks dropped from a record Friday, amid economic data showing potential inflation pressures and increased talk of a possible pullback in central bank support. Still, the S&P 500 Index capped its biggest monthly rally since November.
Treasury yields held above 1.6% in U.S. hours. Crude oil crept up toward $64 a barrel.
Inflation risks are back in focus, though some data are skewed by last year’s pandemic shock. Fiscal stimulus helped drive the strongest monthly gains in U.S. personal incomes in records back to 1946, and the Federal Reserve’s preferred pricing gauge rose by the most since 2018. Investors are also concerned that central banks may start tapering the asset purchase programs that have supported the recovery.
“Interest rates going forward will be led more by expectations on the tapering from the Fed rather than by inflation,” Raffaele Bertoni, head of debt capital markets at Gulf Investment Corp., said on Bloomberg Television.
In his latest annual meeting, billionaire Warren Buffett warned of rising price pressures and a “buying frenzy” spurred by low interest rates. Dallas Fed President Robert Kaplan, who’s not currently a voter on the rate-setting committee, said signs of excessive risk-taking suggest it’s time to start debating a reduction in bond purchases. His remarks contrast with those of Fed Chairman Jerome Powell.
Top U.S. financial officials are also downplaying the risks of a surge in the cost of living. Treasury Secretary Janet Yellen said in a weekend interview that the demand boost from President Joe Biden’s economic plan will be spread over a decade.
Elsewhere, India’s virus crisis is worsening, with daily deaths hitting another record on Sunday. Prime Minister Narendra Modi has come under fire for his handling of the Covid-19 crisis and his party is trailing in a key state election.
Here are some key events to watch this week:
A slew of manufacturing PMIs are due Monday, including from U.S. and ChinaFed Chair Powell speaks in an event hosted by the National Community Reinvestment CoalitionThe Reserve Bank of Australia monetary policy decision is due TuesdayThe Treasury announces its quarterly refunding on WednesdayChicago Fed President Charles Evans gives a virtual speech on the U.S. economy at an event hosted by Bard College; Cleveland Fed‘s Loretta Mester speaks to the Boston Economic Club on WednesdayBank of England rate decision ThursdayU.S. April employment report is released on Friday
These are some of the main moves in markets:
S&P 500 futures rose 0.3% as of 8:06 a.m. in Hong Kong. The S&P 500 fell 0.7% FridayAustralia’s S&P/ASX 200 Index was flatSouth Korea’s Kospi index was flat.Hong Kong’s Hang Seng Index futures fell 0.3% earlier
The yen was at 109.40 per dollarThe offshore yuan was at 6.4743 per dollarThe Bloomberg Dollar Spot Index was little changed after climbing 0.7% FridayThe euro traded at $1.2023
The yield on 10-year Treasuries was little changed at 1.63%. Treasury futures are in the green. Cash Treasuries won’t trade in Asia MondayAustralia’s 10-year bond yield held at 1.75%
West Texas Intermediate crude rose 0.3% to $63.79 a barrel after sliding more than 2% FridayGold was at $1,768.03 an ounce
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