(Bloomberg) — Stocks are set to climb Monday after U.S. equities rallied to a record and Treasuries advanced on Jerome Powell’s signal of a cautious and gradual withdrawal of pandemic-era Federal Reserve economic support.
Equity futures for Japan, Australia and Hong Kong rose. The S&P 500 hit a new peak Friday following Chair Powell’s Jackson Hole speech, in which he said the Fed may start paring bond purchases this year, but is in no hurry to raise interest rates and would be guided by data to weigh risks from the delta virus variant. Powell didn’t give a specific timeline for scaling back stimulus.
Traders are awaiting U.S. jobs data this week to see if they flag a recovery strong enough for an earlier tapering. That could extend the first weekly steepening of the Treasury yield curve since July. Meanwhile, the dollar was mixed in early Asian trading and New Zealand’s currency slipped.
Commodity markets are focused on Hurricane Ida. The storm, which barreled into the Louisiana coast Sunday, threatens oil, natural gas and fuel supplies in the U.S. Gulf of Mexico explorers and Louisiana refineries have shut production.
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 fast-spreading delta strain. Markets so far are reposing confidence in the ability of policy makers to pull off a delicate balancing act.
“We most likely still have a few months of a market rally ahead of us, but the second half of next year might be difficult,” Sebastien Galy, senior macro strategist at Nordea Investment Funds, wrote in a note. He added that the “real concern will be when short-term interest rates are expected to rise and that should happen in 2022, most likely in the second half.”
In Asia, Beijing’s regulatory broadside against private industry remains a key focus area. The latest step is a two-month campaign to crack down on commercial platforms and social media accounts that post finance-related information deemed economically harmful.
Elsewhere, gold begins the week above $1,800 an ounce and Bitcoin is trading around $49,000.
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 WednesdayEurozone 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:
The S&P 500 rose 0.9% FridayThe Nasdaq 100 rose 1% FridayNikkei 225 futures rose 0.8%Australia’s S&P/ASX 200 futures gained 0.2%Hang Seng Index futures added 0.2% earlier
The Japanese yen was at 109.87 per dollarThe offshore yuan traded at 6.4624 per dollarThe Bloomberg Dollar Spot Index fell 0.5% FridayThe euro was at $1.1795
The yield on 10-year Treasuries declined four basis points to 1.31% Friday
West Texas Intermediate crude rose 2% to $68.74 a barrel FridayGold rose 1.4% to $1,817.58 an ounce Friday
More stories like this are available on bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.