(Bloomberg) — Asian stocks dipped Tuesday amid concerns a more infectious Covid-19 strain will derail an economic recovery. Treasuries and the dollar were steady after gains.
An MSCI index of Asia-Pacific shares was on track for its first decline in six days as countries in the region are struggling to contain the highly transmissible Delta variant of the virus. U.S. futures dipped after technology stocks led U.S. benchmarks to fresh records Monday, while new limits on travel from Britain dragged on cruise operators and airlines. European contracts edged up.
The Treasury yield curve flattened amid month-end index rebalancing and the break in auctions until July 12, reducing supply. Oil was steady with the market expecting OPEC+ producers to increase supply at an upcoming meeting. Bitcoin was steady around mid-$34,000.
Global stocks are poised to close out their fifth quarterly advance amid a worldwide vaccine rollout that powered an economic recovery and sparked concerns about increasing prices pressures and the withdrawal of stimulus measures. The recovery also drove the reflation trade as more economies reopened, though that is being hampered as some countries, especially in Asia, are falling behind in their vaccine strategies.
The U.S. is now the best place to be during the pandemic due to its fast and expansive vaccine rollout stemming what was once the world’s worst outbreak. Meanwhile, parts of the Asia-Pacific region that performed well in the ranking until now — like Singapore, Hong Kong and Australia — dropped as strict border curbs remain in place.
“The Delta variant has also emerged in our client conversations as a potential threat to reflation/inflation,” JPMorgan Chase & Co. strategists led by Marko Kolanovic said. “The economic consequences are likely to be limited given progress on vaccinations across developed market economies. It could, however, pose some risk of a delay in the recovery in countries where vaccination rates remain lower.”
Read: Asean Equities May Have Priced In Virus Setback: Taking Stock
For more market commentary, follow the MLIV blog.
Here are some events to watch in the markets this week:
OECD meets in Paris to finalize a proposal to overhaul global minimum corporate taxation WednesdayChina’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party ThursdayOPEC+ ministerial meeting ThursdayECB President Christine Lagarde speaks FridayThe U.S. jobs report is due Friday
These are some of the main moves in markets:
S&P 500 futures dipped 0.1% as of 6:54 a.m. in London. The S&P 500 rose 0.2%Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 1.3%Topix index fell 0.9%Australia’s S&P/ASX 200 Index dropped 0.1%Kospi index lost 0.6%Hang Seng Index retreated 0.8%Shanghai Composite Index was down 0.8%Euro Stoxx 50 futures fell 0.1%
The yen traded at 110.54 per dollarThe offshore yuan was at 6.4595 per dollarThe Bloomberg Dollar Spot Index was little changedThe euro traded at $1.1919
The yield on 10-year Treasuries held at 1.48%Australia’s 10-year bond yield dropped five basis points to 1.54%
West Texas Intermediate crude was at $72.79 a barrel, down 0.2%Gold was at $1,778.33
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