Stocks in Asia Look Set to Open on Firmer Footing: Markets Wrap

(Bloomberg) — Asian stocks may climb when trading begins Monday, providing some relief from the worries about slowing economic growth and sticky inflation that continue to cast a long shadow across markets.

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Futures pointed higher for bourses in Japan and Australia, while S&P 500 and Nasdaq 100 contracts fluctuated, after Wall Street ended in the green Friday. US stock and bond markets will be closed for the Independence Day holiday.

Treasuries jumped last week after a first-half drubbing, reflecting escalating bets that a looming recession will limit how high the Federal Reserve can hike rates to fight inflation. New Zealand and Australian bonds rose in the wake of the US rally.

A dollar gauge was steady, crude oil was near $108 a barrel and Bitcoin hovered below the closely watched $20,000 level.

In the US and elsewhere, signs of economic weakness are becoming more apparent in everything from personal spending to manufacturing. Investors are increasingly fretting about recession and its implications rather than focusing exclusively on elevated price pressures.

The psychology of the market is “shifting radically from inflation concerns to one now where we’re firmly focused on growth,” Chris Weston, head of research at Pepperstone Group, wrote in a note. One of the fears now is that the Fed will be too slow in dialing back on rate increases, he said.

In China, Covid cases continued to rise over the weekend, another test for its strategy of trying to eliminate the pathogen with mass testing and lockdowns.

Separately, Chinese developer Shimao Group Holdings Ltd. said it didn’t pay a $1 billion dollar note that matured Sunday, adding to a record year of offshore-bond delinquencies in the sector.

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What to watch this week:

Australia rate decision, Tuesday
PMIs for euro area, China, India among others, Tuesday
US factory orders, durable goods, Tuesday
FOMC minutes, US PMIs, ISM services, JOLTS job openings, Wednesday
EIA crude oil inventory report, Thursday
Fed Governor Christopher Waller, St. Louis Fed President James Bullard, scheduled to speak, Thursday
ECB account of its June policy meeting, Thursday
US employment report for June, Friday

Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.1% as of 8:23 a.m. in Tokyo. The S&P 500 rose 1.1% Friday
Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 0.7% Friday
Nikkei 225 futures rose 1.7%
Australia’s S&P/ASX 200 futures rose 1.5%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was at $1.0435, up 0.2%
The Japanese yen was at 135.19 per dollar
The offshore yuan was at 6.7013 per dollar

Bonds

The yield on 10-year Treasuries declined 13 basis points to 2.88% Friday
Australia’s 10-year yield declined 10 basis points to 3.49%

Commodities

West Texas Intermediate crude was at $108.54 a barrel
Gold was at $1,810.17 an ounce