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Stocks Steady, U.S. Futures Up as Powell Awaited: Markets Wrap 


(Bloomberg) — Asian stocks were steady Friday and U.S. futures rose ahead of a key Federal Reserve gathering that may offer clues about the timeline for tapering stimulus.

MSCI Inc.’s Asia-Pacific gauge eked out a gain, with stocks climbing in China, where the central bank supported sentiment after signaling targeted steps to cushion the economy. S&P 500 and Nasdaq 100 futures advanced and European contracts were little changed as traders awaited Fed Chair Jerome Powell’s speech at the Jackson Hole symposium.

President Joe Biden’s advisers are considering backing Powell for a second term, people familiar with the matter said, a step that could bolster expectations of continuity in accommodative monetary policy.

Treasury yields edged lower and the dollar slipped. A flood of Treasury options expiring Friday raise the prospect for volatility after Powell’s remarks. Some Fed officials overnight said the time to start tapering stimulus is near, weighing on the S&P 500, which dipped from a record.

The recovery from the pandemic and elevated inflation are supporting calls for monetary policy normalization. But the recent spread of the delta virus strain has complicated economic reopening. Markets are waiting to see how Powell balances these competing factors in his comments.

While investor mood ahead of Jackson Hole “arguably points to an accommodative enough Fed tilt to keep markets buoyed, thin trading in the U.S. bond markets this week suggests latent caution, and sideline bias in search of more clarity,” Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore, wrote in a note.

Among Fed officials, Dallas President Robert Kaplan said he favors the start of tapering in October or shortly after. St. Louis’s James Bullard called for a start in the fall. Kansas City Fed’s Esther George urged an early move to begin this year. None of them vote on policy in 2021.

West Texas Intermediate crude headed toward its best week since October. Gold climbed past $1,800 an ounce. Bitcoin was trading around $47,000.

Here are some events to watch this week:

Fed officials participate in the Jackson Hole Economic Policy Symposium on FridayJuly 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:

Stocks

S&P 500 futures rose 0.3% as of 7:12 a.m. in London. The S&P 500 fell 0.6%Nasdaq 100 futures added 0.3%. The Nasdaq 100 fell 0.6%Japan’s Topix index shed 0.3%Australia’s S&P/ASX 200 index was flatSouth Korea’s Kospi index increased 0.2%Hong Kong’s Hang Seng index added 0.1%China’s Shanghai Composite index rose 0.5%Euro Stoxx 50 futures were little changed

Currencies

The Bloomberg Dollar Spot Index fell 0.1%The euro was at $1.1762The Japanese yen was at 109.99 per dollarThe offshore yuan was at 6.4820 per dollar

Bonds

The yield on 10-year Treasuries fell one basis point to 1.34%

Commodities

West Texas Intermediate crude was at $68.59 a barrel, up 1.7%Gold was at $1,803.08 an ounce, rising 0.6%

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