(Bloomberg) – Asian stocks appeared stable open on Friday as traders weighed the risks from China to the global recovery. Treasury bond yields rose and the dollar stayed higher after surprisingly strong US retail sales.
Futures rose in Japan and Hong Kong but fell in Australia while S&P 500 and Nasdaq 100 contracts fell. US stocks closed lower for the most part after bobbing between gains and losses ahead of Friday’s quarterly options and futures expiration, which can trigger volatility.
US retail sales rose unexpectedly in August, easing some of the concerns about the impact of the Delta option and underscoring the case for the US Federal Reserve to cut incentives. Unemployment claims increased, likely reflecting the volatility of the weekly data as the labor market generally rebounded.
Traders are watching developer China Evergrande Group’s debt crisis for signs of wider contagion in the world’s second largest economy. Beijing’s regulatory crackdown, which spans technology through to gambling, once again hurt a number of US-listed Chinese stocks and casino operators with exposure to Macau.
Global stocks are on track for a second weekly decline, dampened by the impact of delta loading on economic reopening, the impact of increased inflation and the unrest in China. The Fed’s monetary policy meeting next week is another potential source of volatility as traders await further clues about the timing of the bond purchases cut and eventually the rate hike.
“Investors should just be prepared that returns over the next five years will be much more subdued than what we’ve really benefited and enjoyed over the past five years,” said Jim McDonald, chief investment strategist, Northern Trust Bank. on Bloomberg television. That outlook includes the prospect of lower valuations over time for Chinese companies facing greater government involvement, he said.
Oil has been stable while iron ore losing streak threatens to push futures back below $ 100 a ton due to declining Chinese steel production. Gold and silver held drops. An index of commodity prices slipped but is still in sight of a record high in 2011, underscoring the inflation worries that pervade the global economy.
Meanwhile, the European Central Bank rejected the accuracy of a Financial Times report on the eurozone interest rate outlook. Bund futures had fallen on the article that said the ECB could hit its inflation target of 2% by 2025 based on unpublished internal models that increase the prospect of earlier than expected rate hikes.
You can find more market analysis on our MLIV blog.
Some of the key moves in the markets:
shares
S&P 500 futures fell 0.1% at 8:14 a.m. in Tokyo. The S&P 500 was down 0.2% and the Nasdaq 100 futures were down 0.1%. The Nasdaq 100 rose 0.1% Nikkei 225 futures rose 0.2% S&P / ASX 200 futures fell 0.2% Hang Seng futures rose 0.3%
Currencies
The Bloomberg Dollar Spot Index was flat, the euro was trading at $ 1.1765, the offshore yuan was trading at $ 6.4534 per dollar, and the Japanese yen was trading at $ 109.73 per dollar
bind
The 10-year Treasury yield rose four basis points to 1.34% Australia’s 10-year yield rose four basis points to 1.30%
raw materials
West Texas Intermediate Crude Oil was at $ 72.63 per barrel, gold was trading at $ 1,753.97 per ounce
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