Asian equities are set for a stable start; Cash slip: contract envelope

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(Bloomberg) – Asian stocks looked set for a stable open on Friday as traders assessed China’s risks to the global recovery. Yields on Treasuries and the dollar rose on the surprise strength of US retail sales.

Futures rose slightly in Japan and Hong Kong, but fell in Australia, while US contracts fell in early Asian exchanges. US stocks closed mostly lower after swinging between gains and losses ahead of the quarterly expiration of options and futures on Friday, which can trigger volatility.

Retail sales in the United States unexpectedly increased in August, allaying some concerns about the impact of the delta variant and highlighting the case for the Federal Reserve to start cutting stimulus. Unemployment claims have risen, likely reflecting volatility in weekly data as the labor market generally rallies.

Traders are monitoring developer China Evergrande Group’s debt crisis for signs of wider contagion in the world’s second-largest economy. Beijing’s regulatory crackdown covering gambling technology has again hurt a gauge of Chinese stocks listed in the United States as well as casino operators exposed to Macau.

Global stocks are on track for a second weekly decline, softened by the impact of delta stress on the economic reopening, the implications of high inflation and the turmoil in China. Another possible source of volatility is the Fed’s policy meeting next week as traders wait for more clues on the timetable to cut bond purchases and possibly raise interest rates.

“After seven months of gains, the stock markets were more turbulent in mid-September,” said Keith Lerner, chief market strategist at Truist Advisory Services. “This is actually quite normal from a historical seasonal perspective, although the ongoing carousel of concerns continues.”

Oil has remained stable, while base metals have been hampered by the risks facing China’s real estate sector from the Evergrande woes. Gold and silver registered declines. A commodity price index has slipped but remains within sight of a record high in 2011, underscoring inflationary concerns spilling over to the global economy.

Meanwhile, the European Central Bank has dismissed the accuracy of a Financial Times report on the eurozone interest rate outlook. Bund futures had fallen on the article, which indicated that the ECB could meet its 2% inflation target by 2025 based on unpublished internal models that foreshadowed rate hikes earlier than planned.

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

S&P 500 futures fell 0.1% at 7.20am in Tokyo. The S&P 500 fell 0.2%. Futures on the Nasdaq 100 fell 0.1%. The Nasdaq 100 rose 0.1% Nikkei 225 futures rose 0.2% S & P / ASX 200 futures fell 0.2% Hang Seng futures rose 0.3 %

Currencies

Bloomberg Dollar Spot Index rose 0.4% Euro was at $ 1.1767 Offshore Yuan was at 6.4535 per dollar Japanese yen was at 109.72 per dollar

Obligations

The yield on 10-year treasury bills rose four basis points to 1.34%

Merchandise

West Texas Intermediate crude was at $ 72.66 per barrel, up 0.1% Gold was at $ 1,752.90 per ounce, down 0.1%

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