Asia Stocks Climb as Traders Mull Growth Outlook: Markets Wrap

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(Bloomberg) — Asian stocks rose Friday as traders assessed the prospect of gradual reductions in central bank stimulus as well as efforts to support the global recovery against risks from the delta coronavirus variant.

Shares climbed in Japan, Australia and South Korea, while U.S. contracts edged up, bringing some relief after a bout of weakness in global equities. The S&P 500 overnight posted its longest losing streak since June. The Biden administration took steps toward requiring large firms to mandate vaccinations or testing, stepping up its fight against the delta strain.

Treasuries held an advance, helped by strong demand at a 30-year bond auction. The dollar was little changed. In commodities, oil slid after China decided to tap crude reserves to ease a surge in energy costs. A broad rally in base metals markets gathered pace.

The Nasdaq Golden Dragon China Index dipped after a bruising tumble in Chinese technology companies in Asia. Beijing’s crackdown on a range of private industries as well as possible steps to cushion the second-largest economy remain in focus for traders.

Global stocks have pulled back from records against a backdrop of elevated inflation and slower economic reopening alongside looming reductions in central bank support. The European Central Bank said it will slow the pace of its pandemic bond-buying in the final quarter of 2021, but President Christine Lagarde added that didn’t herald a winding down in stimulus with the delta strain still posing risks.

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“Ultimately, the path back to a more normal economic environment is likely going to be long, and we can expect setbacks along the way,” Brad McMillan, chief investment officer for Commonwealth Financial Network, wrote in a note. “The recent slowdown could lead to further volatility in the months ahead.”

The latest reports showed lower U.S. jobless claims but also more virus disruption, including Microsoft Corp.’s move to scrap plans to fully reopen its offices.

What to watch this week:

U.S. President Joe Biden may make his choice this week on whether to renominate Fed Chair Jerome Powell to a second term

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 9:20 a.m. in Tokyo. The S&P 500 fell 0.5%Nasdaq 100 futures added 0.1%. The Nasdaq 100 fell 0.4%Japan’s Topix index climbed 0.6%Australia’s S&P/ASX 200 index increased 0.7%South Korea’s Kospi added 0.5%Hang Seng futures climbed 0.6%

Currencies

The Bloomberg Dollar Spot Index was little changedThe euro was at $1.1828The offshore yuan was at 6.4507 per dollarThe Japanese yen was at 109.73 per dollar

Bonds

The yield on 10-year Treasuries held at 1.30%Australia’s 10-year yield fell three basis points to 1.24%

Commodities

West Texas Intermediate crude was at $67.98 a barrel, down 0.2%Gold was at $1,796.18 an ounce

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