Most Asian Stocks Climb; Dollar, Crude Advance: Markets Wrap
(Bloomberg) — Most Asian stocks rose Thursday as traders bet the global recovery will be resilient to the new virus strain. Treasuries were stable after declining.
MSCI Inc.’s gauge of Asia Pacific equities advanced for a third day with Hong Kong leading the advance. U.S. contracts fluctuated after the S&P 500 and the technology-heavy Nasdaq 100 extended a rally.
China’s central bank set its reference rate for the yuan at a weaker-than-expected level against the dollar after the currency’s advance to the highest since 2018. The British pound dropped to the lowest this year after fresh restrictions as the omicron strain spreads. The dollar and crude climbed, while the 10-year Treasury yield held above 1.50% and the curve steepened.
Pfizer Inc. and BioNTech SE said initial lab studies show a third dose of their Covid-19 vaccine may be needed to neutralize the omicron variant. Pfizer will have data telling how well its vaccine prevents infections with the omicron before the end of the year, Chief Executive Officer Albert Bourla said, adding he expects a third booster dose will “do the job” in restoring high levels of protection.
The global equity rally will be tested as traders expect more volatility until there is more clarity on the omicron variant’s threat to the economy, and ahead of U.S. consumer inflation numbers this week and a Federal Reserve meeting next week that may provide clues on the pace of tapering and interest rate increases.
“We are looking to potentially have a rise in volatility even if the market continues higher around those events next week,” said Frances Stacy, Optimal Capital portfolio strategist, on Bloomberg Television. “Many of the catalysts that gave us this boom out of Covid are slowing. And then you have the Fed potentially tapering into a decelerating economy.”
In China, consumer prices rose at the fastest pace since August 2020. Meanwhile, the nation’s indebted developers remain under scrutiny. A group of Kaisa Group Holdings Ltd. bondholders is close to signing non-disclosure agreements with the developer in a move that would pave the way for discussions around a potential financing deal for the beleaguered firm.
On the virus front, the U.K. tightened rules advising people to work from home and mandating the use of so-called vaccine passports in large venues. Denmark introduced a light version of the lockdown it had last winter.
Bloomberg’s Markets Live team is running a survey on asset views for 2022. It’s anonymous, takes about 2 minutes, and the results will be shared in the latter part of December. To participate, click here.
Here are some key events to watch this week:
- Federal Reserve Bank of Minneapolis President Neel Kashkari speaks Thursday
- U.S. CPI Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
- S&P 500 futures edged up 0.1% as of 12 p.m. in Tokyo. The S&P 500 rose 0.3%
- Nasdaq 100 futures 0.1%. The Nasdaq 100 rose 0.4%
- Topix index dipped 0.3%
- Australia’s S&P/ASX 200 Index advanced 0.2%
- Kospi index rose 0.6%
- Hang Seng Index rose 1.2%
- Shanghai Composite Index rose 0.1%
- Euro Stoxx 50 futures gained 0.4%
- The Japanese yen was little changed at 113.73 per dollar
- The offshore yuan was at 6.3434 per dollar
- The Bloomberg Dollar Spot Index edged up 0.1%
- The euro traded at $1.1333
- The yield on 10-year Treasuries was at 1.52%
- Australia’s 10-year bond yield rose six basis points to 1.68%
- West Texas Intermediate crude rose 1.1% to $73.15 a barrel
- Gold was at $1,783.33