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(Bloomberg) — Asian stocks looked set for a tailwind Tuesday after another all-time high for U.S. shares on optimism that the global recovery can weather risks from the coronavirus and tightening monetary policy.
Equity futures for Japan pointed higher after the S&P 500 notched its 69th record close this year, led by the energy and technology sectors, though volumes were lower than average. U.S. contracts were steady. Hong Kong will reopen after a holiday and Australia remains closed.
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A U.S. index of Chinese stocks dipped, taking its 2021 losses past 44% amid Beijing’s regulatory crackdown. The latest steps are new curbs on offshore listings by firms in sectors off-limits to foreign investment, a move that could plug a loophole long used by the tech industry to raise capital overseas.
The Treasury yield curve flattened in the U.S. session and longer-maturity bonds gained. A gauge of the dollar edged up. Crude oil rallied in part on wagers that global economic reopening faces only a temporary setback from the outbreak of the omicron virus strain.
Global shares are on course for a third year of double-digit returns, powered by the U.S. rally. The climb has overcome coronavirus waves and a shift by some key central banks toward tighter monetary policy to fight high inflation.
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“The remedies that we put in place to counter the Covid recessions, they were so substantial, we had massive stimulus,” Sandip Bhagat, chief investment officer of Whittier Trust, said on Bloomberg Television. “We’ll be left with a legacy of those policy responses well into the future” and stocks can continue advancing, he said.
Traders were also evaluating the latest comments from China’s central bank. It reiterated that the yuan exchange rate will be more flexible in 2022 and will stay basically stable at a reasonable and balanced level. The People’s Bank of China also said it will ensure the overall size of credit keeps growing in 2022.
Meanwhile, China Evergrande Group faces an initial interest payment deadline for two dollar bonds Tuesday, in the property giant’s first major test of investor confidence after it was officially labeled a debt defaulter.
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What to watch this week:
U.S. initial jobless claims, Thursday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:14 a.m. in Tokyo. The S&P 500 rose 1.4%Nasdaq 100 futures were steady. The Nasdaq 100 rose 1.6%Nikkei 225 futures rose 1%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%The euro was at $1.1329The Japanese yen was at 114.87 per dollarThe offshore yuan was at 6.3740 per dollar
Bonds
The yield on 10-year Treasuries declined about two basis points to 1.48%
Commodities
West Texas Intermediate crude rose 0.5% to $75.91 a barrelGold was at $1,812.03 an ounce
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