Asian stocks set to open mixed amid strong dollar: Markets wrap

(Bloomberg) – Asian stocks looked poised for a mixed start Friday at the end of a week in which Treasury yields and the dollar jumped amid bets for faster Fed policy tightening as the pandemic recovery stoked inflation.

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Stock futures for Japan and Hong Kong fell and Australia was flat, after European shares rose despite worsening Covid-19 trends. US markets were closed Thursday for Thanksgiving and Friday’s session will be shortened, which could lead to tight trading volumes.

Strong economic data in the US and the latest Fed comments on price pressures have spurred expectations of a faster exit from ultra-loose monetary settings. The dollar’s gauge is around a 16-month high, while the two-year US Treasury yield is set for the biggest weekly gain since 2019.

Crude oil declined as traders objected to the planned coordinated release of reserves by consuming nations against the possibility of OPEC+ supply cutbacks in response. Gold continues to struggle. Bitcoin paid about $59,000.

Global stocks have jumped about 16% this year after investors poured nearly $900 billion into exchange-traded funds and long-term funds only in 2021 — exceeding the combined total for the past 19 years. But fears are growing that a combination of tighter monetary policy, the virus outbreak and slowing Chinese growth could weaken the upside.

Economists at Goldman Sachs Group Inc. said: They expect the Fed to tighten policy faster than previously expected, including doubling the pace of reducing bond purchases to $30 billion per month from January. They are seeing a rise in interest rates from nearly zero in June.

“The increased openness to accelerating the taper likely reflects somewhat higher-than-expected inflation over the past two months and greater comfort among Fed officials that the faster pace will not shock financial markets,” Goldman’s team led by Jan Hatzius wrote in. note.

In China, the economy continued to slow in November with car and home sales declining again as the housing market crisis continued, according to the Bloomberg aggregate index of eight early indicators.

Meanwhile, scientists in South Africa are studying a worrying new type of novel coronavirus, which was recently identified, raising fears that the country could face a dangerous fourth wave that could spread internationally. The UK will temporarily ban flights from South Africa and five other African countries due to concerns about the new, dramatically different strain.

For more market analysis, read our MLIV blog.

Here are some of the main events this week:

Some of the main movements in the markets:

Stores

  • The S&P 500 rose 0.2% on Wednesday

  • The Nasdaq 100 Index is up 0.4% on Wednesday

  • Nikkei 225 index futures declined 0.2%.

  • S&P/ASX 200 futures rose 0.1%

  • Hang Seng futures fell 0.3%

Currencies

  • Bloomberg spot dollar index rose 0.1%.

  • The euro was at 1.1209 dollars

  • The Japanese yen was at 115.37 to the dollar

  • The external yuan was 6.3882 per dollar

bonds

goods

  • West Texas Intermediate crude fell 0.5% to $78.03 a barrel

  • Gold was at $1,788.76 an ounce

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