(Bloomberg) — Most Asian stocks fell and U.S. futures fluctuated Wednesday after indebted developer China Evergrande Group reached an agreement on some interest payments and the Chinese central bank boosted a cash injection.
Most Read from Bloomberg
Equities were lower in China but avoided a bigger selloff after trading resumed following a holiday during which global markets where whipsawed by fears of contagion radiating from crisis-hit Evergrande, which has more than $300 billion of liabilities. Japanese shares slipped but Australian stocks rose.
S&P 500 and Nasdaq 100 contracts swung between gains and losses. Commodity-linked currencies such as the Australian and New Zealand dollars pushed higher. Treasuries and the U.S. dollar were little changed.
Traders are also awaiting the Federal Reserve meeting, which is expected to signal a reduction in stimulus later this year. A strong auction of 20-year debt highlighted cautious sentiment. Elsewhere, Bitcoin slid below $40,000 for the first time since early August before rebounding.
The Fed’s potential timeline for tapering stimulus and any shifts in expectations for interest-rate increases amid elevated price pressures will be key for investors. The Fed meeting comes after a period of market volatility stoked by Evergrande’s woes. China’s wider property-sector curbs are also feeding into concerns about a slowdown in the recovery from the pandemic.
“In the next few weeks and perhaps in the next couple of months, Evergrande coupled with FOMC, the delta variant and a host of other issues will continue to create great volatility and to some extent that volatility will be a buying opportunity,” said Vasu Menon, OCBC Bank Wealth Management executive director for investment strategy.
Investors are eager for clues about how Beijing plans to deal with Evergrande’s cash crunch. The firm’s onshore property unit said it reached an agreement with yuan bondholders on an interest payment due Sept. 23, without clarifying the terms. The People’s Bank of China increased its injection of short-term cash into the financial system, helping to soothe sentiment.
In Japan, the central bank left its main monetary policy settings unchanged. Elsewhere, oil advanced for a second day, while iron ore futures climbed but stayed below $100 a ton on China’s steel output curbs. South Korea’s markets are closed for a holiday.
Here are key events to watch this week:
-
Federal Reserve rate decision, Wednesday
-
Bank of England rate decision, Thursday
-
Fed Chair Jerome Powell, Fed Governor Michelle Bowman and Vice Chairman Richard Clarida discuss pandemic recovery, Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
-
S&P 500 futures rose 0.1% as of 11:45 a.m. in Tokyo. The S&P 500 was little changed
-
Nasdaq 100 futures were flat. The Nasdaq 100 rose 0.1%
-
Japan’s Topix index fell 0.7%
-
Australia’s S&P/ASX 200 Index added 0.7%
-
China’s Shanghai Composite Index fell 0.6%
Currencies
-
The Japanese yen was at 109.42 per dollar, down 0.2%
-
The offshore yuan traded at 6.4749 per dollar, up 0.1%
-
The Bloomberg Dollar Spot Index was steady
-
The euro was little changed at $1.1724
Bonds
Commodities
-
West Texas Intermediate crude was at $71.07 a barrel, up 0.8%
-
Gold was at $1,777.20 an ounce, up 0.2%
Most Read from Bloomberg Businessweek
©2021 Bloomberg L.P.
