(Bloomberg) — Stocks in Asia are set for a muted start to the week with some major markets closed for a holiday and inflation concerns resurfacing. U.S. futures opened higher.
Australian futures pointed lower, while those in Hong Kong also fell earlier. S&P 500 and Nasdaq 100 contracts climbed. Markets in Japan and China are shut for holidays. U.S. stocks dropped from a record Friday, with economic data showing potential inflation pressures and hawkish remarks from a Federal Reserve official. Still, the S&P 500 Index capped its biggest monthly rally since November.
Signs of excessive risk-taking suggest it’s time to start debating a reduction in bond purchases, said Robert Kaplan, president of the Dallas Federal Reserve. Treasury yields held above 1.6%. Oil and gold were little changed.
“Interest rates going forward will be led more by expectations on the tapering from the Fed rather than by inflation,” Raffaele Bertoni, head of debt capital markets at Gulf Investment Corp., said on Bloomberg Television.
Stocks start the month with inflation risks back in focus, though the data are skewed in part by last year’s pandemic shock. U.S. personal incomes soared in March by the most in monthly records back to 1946, powered by fiscal stimulus. A key measure of inflation that the Fed officially uses for its target rose by the most since 2018.
The top financial officials in the U.S. are downplaying the risks of a surge in the cost of living, however. Treasury Secretary Janet Yellen said in a weekend interview that the demand boost from President Joe Biden’s economic plan will be spread over a decade. And Fed Chair Jerome Powell maintains that inflationary pressures are likely temporary.
Meanwhile, India’s virus crisis is worsening, with daily deaths hitting another record on Sunday. Prime Minister Narendra Modi has come under fire for his handling of the Covid-19 crisis and his party is trailing in a key state election.
Here are some key events to watch this week:
A slew of manufacturing PMIs are due Monday, including from U.S. and ChinaFed Chair Powell speaks in an event hosted by the National Community Reinvestment CoalitionThe Reserve Bank of Australia monetary policy decision is due TuesdayThe Treasury announces its quarterly refunding on WednesdayChicago Fed President Charles Evans gives a virtual speech on the U.S. economy at an event hosted by Bard College; Cleveland Fed‘s Loretta Mester speaks to the Boston Economic Club on WednesdayBank of England rate decision ThursdayU.S. April employment report is released on Friday
These are some of the main moves in markets:
S&P 500 futures rose 0.3% as of 6:03 a.m. in Hong Kong. The S&P 500 fell 0.7% FridayAustralia’s S&P/ASX 200 Index futures slipped 0.1%Hong Kong’s Hang Seng Index futures fell 0.3% earlier.
The yen was at 109.35 per dollarThe offshore yuan was at 6.4747 per dollarThe Bloomberg Dollar Spot Index rose 0.7% FridayThe euro rose 0.1% to $1.2034
The yield on 10-year Treasuries was little changed at 1.63%. Treasury futures opened in the green. Cash Treasuries won’t trade in Asia Monday
West Texas Intermediate crude was little changed at $63.67 a barrel after sliding more than 2% FridayGold dipped 0.1% to $1,766.79 an ounce
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