Asia Stocks Set for Higher Open; Currencies Steady: Markets Wrap

Asian stocks were set to gain on Monday as investors looked to the start of earnings season for further clues on how companies are faring with the pandemic.

Futures rose in Japan, Australia and Hong Kong, while U.S. contracts pushed higher. Currency markets saw muted moves in early trading and oil retreated. Banks — which kick off the U.S. reporting season this week — led the S&P 500 to gains on Friday. Treasuries reversed a rise that saw the five-year yield hit a record low.

With global equities trading near their highest since February, investors are waiting to hear what companies have to say about their outlook for profits. As governments gradually ease coronavirus shutdowns to revive growth, new outbreaks are causing further restrictions and leading some market players to wind back their expectations on the pace of recovery.

On the virus front, Florida on Sunday posted the biggest one-day rise in cases since the coronavirus pandemic began in the U.S., reporting 15,300 new infections. South Carolina and Texas set new marks a day earlier, while New York’s rate remained steady.

“The spectre of a global second wave of the pandemic has resulted in a renewed veil of caution being thrown across the risk asset space in recent days,” said Simon Ballard, chief economist at First Abu Dhabi Bank Pjsc. “The global economy remains delicately balanced for now, all of which we believe should continue to favor a cautious approach to asset allocation and risk as we push through the summer months.”

Here are some key events coming up:

  • JPMorgan, Bank of America, Wells Fargo, Goldman Sachs, BNY Mellon and Citigroup start the U.S. earnings season.
  • Wednesday brings the Bank of Japan’s policy decision and a Governor Haruhiko Kuroda briefing.
  • The EIA crude oil inventory report is due Wednesday.
  • China releases second-quarter GDP on Thursday as well as key economic indicators for June.
  • The European Central Bank meets to set monetary policy on Thursday, with President Christine Lagarde holding a virtual press conference afterward.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index climbed 0.5% as of 7:01 a.m. in Tokyo. The gauge rose 1.1% on Friday.
  • Futures on Japan’s Nikkei 225 advanced 1.3%.
  • Hang Seng futures added 0.3%.
  • Futures on Australia’s S&P/ASX 200 Index rose 1.6%.

Currencies

  • The yen was at 106.93 per dollar.
  • The offshore yuan traded at 7.0088 per dollar.
  • The euro bought $1.1306.

Bonds

  • The yield on 10-year Treasuries rose four basis points to 0.65% on Friday.

Commodities

  • West Texas Intermediate crude oil dipped 0.2% to $40.48 a barrel.
  • Gold was at $1,800.05 an ounce, little changed.

— With assistance by Nancy Moran

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