Stocks Steady as Traders Mull Growth Risks; Oil Up: Markets Wrap

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(Bloomberg) — Asian stocks were steady Monday as traders evaluated the risk of a slower economic recovery from the pandemic amid elevated inflation.

Shares slipped in Japan and were little changed in South Korea and Australia, while U.S. futures rose. The S&P 500 last week dropped the most since mid-June on investor caution over the challenges for economic reopening from the delta virus strain.

Treasury yields held an advance as traders assess price pressures and their impact on the likely timeline for a reduction in Federal Reserve stimulus. An update on U.S. consumer prices this week will feed into the debate about whether or not elevated costs are transient. The dollar was steady.

Chinese technology stocks may come under renewed pressure after a report that China is seeking to break up Ant Group Co.’s Alipay and create a separate app for its loan business. Trade tension is also in the spotlight again after the Biden administration was said to be weighing a new probe into Chinese subsidies.

The ongoing march of Covid-19 even as vaccine rollouts accelerate is undermining confidence in the economic recovery and contributing to supply-shock inflation. Key central banks are also getting closer to paring pandemic-era stimulus, posing risks for financial markets.

“Risk assets will continue to struggle in the near term with weak hard data due to the delta outbreak and supply disruptions over the summer,” Barclays Plc strategists including Shinichiro Kadota wrote in a note. But the Barclays team said it is wary of turning too bearish as progress toward containing the virus will likely eventually bolster growth prospects.

Meanwhile, President Joe Biden’s $3.5 trillion tax-and-spending plan faces challenges. Democrat Senator Joe Manchin has cast doubt on the timeline for pushing Biden’s economic agenda through Congress, and proposed tax rates may be watered down to boost the chances of the package being passed.

Elsewhere, North Korea said it successfully test-fired a new type of long-range cruise missile, ratcheting up tensions on the Korean Peninsula. Oil climbed above $70 a barrel and Bitcoin was around $46,000. Epic Games Inc. filed a notice of appeal in its closely watched antitrust lawsuit against Apple Inc.

Here are some events to watch this week:

OPEC monthly oil market report, MondayU.S. consumer-price index, TuesdayApple product-launch event, TuesdayChina retail sales, property prices, industrial production, WednesdayQuadruple witching day for U.S. markets, Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.4% as of 9:15 a.m. in Tokyo. The S&P 500 fell 0.8% FridayNasdaq 100 contracts were up 0.3%. The Nasdaq 100 fell 0.8%Japan’s Topix index fell 0.2%Australia’s S&P/ASX 200 Index was little changedSouth Korea’s Kospi was steadyHang Seng Index futures lost 0.7% earlier

Currencies

The Japanese yen traded at 109.92 per dollarThe offshore yuan was at 6.4422 per dollarThe Bloomberg Dollar Spot Index was little changedThe euro was at $1.1809

Bonds

The yield on 10-year Treasuries rose about one basis point to 1.35%Australia’s 10-year bond yield rose five basis points to 1.27%

Commodities

West Texas Intermediate crude rose 0.8% to $70.30 a barrelGold was at $1,787.01 an ounce

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