Asian Stocks Dip, Dollar Up as China Tech Retreats: Markets Wrap
(Bloomberg) — Asian stocks fell Thursday amid a retreat in Chinese technology shares and caution ahead of a Federal Reserve gathering that may provide more clues about its approach to paring stimulus. The dollar rose.
MSCI Inc.’s Asia-Pacific gauge snapped a three-day rally, with Chinese tech names slumping on disappointing earnings and Beijing’s crackdown on private industries. South Korean shares dipped after the nation became the first major Asian economy to raise interest rates since the onset of the pandemic.
U.S. equity futures declined following another record close for the S&P 500 and Nasdaq 100. The 10-year U.S. Treasury yield held an advance. Traders are looking ahead to the Jackson Hole symposium, which may offer fresh insight on how the Fed intends to scale back bond purchases.
The uncertainty over China “is going to continue, we don’t know how long or how far-reaching this regulatory crackdown is going to last,” Esty Dwek, head of global market strategy with Natixis Investment Managers, said in a Bloomberg Television interview. But she added the worst of the clampdown could well be over.
Views are split on whether Chairman Jerome Powell’s speech to the Jackson Hole meeting Friday will provide a clearer guide on tapering emergency Fed support. While the ongoing economic rebound and elevated inflation add to the case for starting policy normalization, the fast-spreading delta virus strain threatens a slower pace of recovery than some had expected.
Powell’s “speech will likely emphasize the economic recovery is well past the crisis and that they will shortly announce they are ready to taper asset purchases,” Edward Moya, senior market analyst at Oanda, wrote in a note.
The latest U.S. data showed orders placed with factories for business equipment unexpectedly stalled in July, marking a pause in a months-long buildup in capital investment.
Elsewhere, crude oil dipped below $68 a barrel, paring a rally this week driven by bets that demand will weather the delta virus strain’s impact on the economic recovery. Gold fell below $1,790 an ounce and Bitcoin slid toward $47,000.
Here are some events to watch this week:
Fed officials attend the Jackson Hole Economic Policy Symposium from Thursday through SaturdayU.S. GDP, initial jobless claims ThursdayJuly U.S. personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.
For more market analysis read our MLIV blog.
Some of the main moves in markets:
S&P 500 futures fell 0.1% as of 6:30 a.m. in London. The S&P 500 rose 0.2%Nasdaq 100 futures lost 0.2%. The Nasdaq 100 was little changedJapan’s Topix index fell 0.1%Australia’s S&P/ASX 200 Index fell 0.6%South Korea’s Kospi index slid 0.6%Hong Kong’s Hang Seng Index fell 1.3%China’s Shanghai Composite Index dropped 0.6%Euro Stoxx 50 contracts were 0.2% lower
The Japanese yen was at 109.96 per dollar, up 0.1%The offshore yuan traded at 6.4794 per dollarThe Bloomberg Dollar Spot Index added 0.1%The euro was at $1.1768
The yield on 10-year U.S. Treasuries was at 1.33%Australia’s 10-year bond yield rose two basis points to 1.18%
West Texas Intermediate crude fell 0.9% to $67.76 a barrelGold was at $1,787.90 an ounce
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