(Bloomberg) -- Asian stocks rose Monday and Treasuries held an advance, bolstered by Jerome Powell’s signal that pandemic-era Federal Reserve policy support will be withdrawn cautiously and gradually.
Japan led gains and Chinese technology stocks advanced on bargain hunting in the beaten-down sector. U.S. futures were steady after a record Wall Street close in the wake of Chair Powell’s Jackson Hole speech. Powell said the Fed may start paring bond purchases this year but is in no hurry to raise interest rates and will be guided by data on Covid-19 risks.
Powell didn’t give a specific timeline for scaling back stimulus. Traders are awaiting U.S. jobs data this week to assess whether the economic recovery merits an earlier tapering. Strong figures could extend the first weekly steepening of the Treasury yield curve since July. The dollar held a drop.
The focus in China remains on Beijing’s regulatory broadside. The latest steps include a campaign to crack down on commercial platforms and social media accounts that post finance-related information deemed economically harmful. Another is a proposed credit-rating system to regulate live streaming firms.
Central banks are seeking to reduce monetary policy support in part to keep a lid on inflation, while at the same time nurturing economic recoveries facing challenges from the delta virus strain. Global shares are at all-time highs, suggesting markets expect policy makers to pull off this delicate balancing act.
“There is little doubt Powell was dovish, relative to market pricing and positioning,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a note. Weston remains “positive on risk for now” but added a slowing global economy allied with Fed policy normalization remains a threat.
Commodity markets are focused on Hurricane Ida. U.S. gasoline futures jumped and oil was steady after the storm barreled ashore in Louisiana, disrupting energy supplies. Elsewhere, gold pared recent gains and Bitcoin was trading around $48,000.
Here are some key events to watch this week:
The U.S. plans to pull out almost all American troops from Afghanistan TuesdayOPEC+ meeting on output WednesdayEuro zone manufacturing PMI WednesdayChina Caixin manufacturing PMI WednesdayU.S. jobs report Friday
For more market analysis read our MLIV blog.
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% of 12:51 p.m. in Tokyo. The S&P 500 rose 0.9%Nasdaq 100 futures added 0.1%. The Nasdaq 100 rose 1%Japan’s Topix index added 0.9%Australia’s S&P/ASX 200 increased 0.2%South Korea’s Kospi climbed 0.3%Hong Kong’s Hang Seng gained 0.3%China’s Shanghai Composite increased 0.3%Euro Stoxx 50 futures climbed 0.1%
Currencies
The Japanese yen was at 109.78 per dollarThe offshore yuan traded at 6.4658 per dollarThe Bloomberg Dollar Spot index was steadyThe euro was at $1.1805
Bonds
The yield on 10-year Treasuries was at 1.31%Australia’s 10-year yield was at 1.18%
Commodities
West Texas Intermediate crude fell 0.1% to $68.68 a barrelGold was at $1,814.94 an ounce, down 0.1%
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