(Bloomberg) — Asian stocks were steady Monday and Treasuries held an advance as traders weighed Jerome Powell’s signal that pandemic-era Federal Reserve policy support will be withdrawn cautiously and gradually.
Shares gained in Japan, slipped in Hong Kong and fluctuated in China, where Beijing’s regulatory broadside remains in focus. U.S. futures were steady after a record Wall Street close in the wake of Chair Powell’s Jackson Hole speech. Powell said the Fed may start paring bond purchases this year but is in no hurry to raise interest rates and will be guided by data on Covid-19 risks.
Powell didn’t give a specific timeline for scaling back stimulus. Traders are awaiting U.S. jobs data this week to assess whether the economic recovery merits an earlier tapering. Strong figures could extend the first weekly steepening of the Treasury yield curve since July. The dollar held a drop.
The latest step in China’s curbs on private industry is a two-month campaign to crack down on commercial platforms and social media accounts that post finance-related information deemed economically harmful.
Central banks are seeking to reduce monetary policy support in part to keep a lid on inflation, while at the same time nurturing economic recoveries facing challenges from the delta virus strain. The fast-spreading variant has dealt a bigger blow to reopening in Asia because of lagging vaccinations.
“There is little doubt Powell was dovish, relative to market pricing and positioning,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a note. Weston remains “positive on risk for now” but added a slowing global economy and Fed policy normalization remain threats to the outlook.
Commodity markets are focused on Hurricane Ida, which imperils U.S. oil, natural gas and fuel supplies. Crude reversed earlier gains and turned lower, while U.S. gasoline futures pushed higher.
Elsewhere, gold held gains and Bitcoin was trading around $49,000.
Here are some key events to watch this week:
The U.S. plans to pull out almost all American troops from Afghanistan TuesdayOPEC+ meeting on output WednesdayEuro zone manufacturing PMI WednesdayChina Caixin manufacturing PMI WednesdayU.S. jobs report Friday
For more market analysis read our MLIV blog.
Some of the main moves in markets:
Stocks
S&P 500 futures slipped 0.1% of 10:45 a.m. in Tokyo. The S&P 500 rose 0.9%Nasdaq 100 futures were flat. The Nasdaq 100 rose 1%Japan’s Topix index added 0.5%Australia’s S&P/ASX 200 lost 0.1%South Korea’s Kospi was little changedHong Kong’s Hang Seng shed 0.5%China’s Shanghai Composite was steady
Currencies
The Japanese yen was at 109.74 per dollar, up 0.1%The offshore yuan traded at 6.4661 per dollarThe Bloomberg Dollar Spot index was steadyThe euro was at $1.1806
Bonds
The yield on 10-year Treasuries was at 1.30%Australia’s 10-year yield was at 1.18%
Commodities
West Texas Intermediate crude fell 0.2% to $68.61 a barrelGold was at $1,817.11 an ounce
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