(Bloomberg) — Asian stocks and U.S. and European futures traded mixed Monday after signs China’s economic recovery may be leveling out and as investors continue to weigh global inflation risks.
Japan underperformed amid concern about an extended state of emergency to curb the coronavirus. Shares fell in Hong Kong and fluctuated in China, where a gauge of the manufacturing industry suggested the economy’s recovery momentum might have peaked. U.S. futures ticked up after the S&P 500 notched its fourth-straight monthly advance. European contracts declined. Treasury yields dropped below 1.60% on Friday. There’s no Treasuries cash trading in Asia amid holidays in the U.S. and U.K.
The offshore yuan stabilized in the wake of comments leaning against its climb. Two state-run newspapers flagged risks fueled by rapid gains in the currency. China also set its daily reference rate at a weaker-than-expected level.
Bitcoin traded below $35,000 after a Friday slump as Bank of Japan Governor Haruhiko Kuroda warned about the token’s volatility and speculative trading.
Global stocks remain near a record, lifted by the ongoing economic recovery from the pandemic and injections of stimulus. The rally has so far weathered concerns that price pressures could force an earlier-than-expected reduction in central bank support.
But investors remain sensitive to the risk, and this week’s U.S. non-farm payrolls report could buffet markets if it changes perceptions of the rebound’s strength. A purchasing managers’ index report in China showed input costs for manufacturers jumped to the highest in about a decade.
“Policy makers have committed to accepting a higher level of inflation, higher volatility in inflation and as that happens you will see inflation moving structurally higher,” Mixo Das, JPMorgan Asia equity strategist, said on Bloomberg TV. “I don’t think this is in the prices yet.”
Here are key events to watch this week:
U.S. markets will be closed for the Memorial Day holiday. U.K. markets will be closed for the Spring Bank holidayReserve Bank of Australia policy decision TuesdayOPEC+ meets to review oil production levels TuesdayPhiladelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan speak WednesdayU.S. employment report for May on Friday
These are some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 7 a.m. in London. The S&P 500 rose 0.1% FridayNasdaq 100 contracts climbed 0.1%. The Nasdaq 100 rose 0.2%Topix index fell 1.3%Australia’s S&P/ASX 200 Index dipped 0.3%Kospi index rose 0.3%Hang Seng Index fell 0.6%Shanghai Composite Index was little changedEuro Stoxx 50 futures fell 0.2%
Currencies
The yen was at 109.74 per dollar, up 0.1%The offshore yuan was at 6.3687 per dollarThe Bloomberg Dollar Spot Index was flatThe euro traded at $1.2193
Bonds
The yield on 10-year Treasuries declined one basis point to 1.59% Friday. Futures were little changedAustralia’s 10-year bond yield rose two basis points to 1.71%
Commodities
West Texas Intermediate crude rose 0.6% to $66.71 a barrelGold was at $1,906.08 an ounce, up 0.1%
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