Asian stocks and US futures fall as bond yields surge: markets envelop

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(Bloomberg) – Most Asian stocks and US futures slipped on Monday as surging energy prices heightened concerns about inflation, pushing bond yields higher.

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MSCI Inc.’s Asia-Pacific stock gauge was on track for its first drop in four sessions, with stocks falling in Japan, Hong Kong and China. US contracts fell after US stocks rose on Friday, with the S&P 500 posting its best week since July as earnings boosted sentiment.

Bond yields in New Zealand and Australia surged after inflation in New Zealand accelerated to the fastest pace in 10 years. Yields on three-year Australian bonds jumped 18 basis points to their highest level since January. Treasury yields continued their ascent, while the dollar rose slightly.

Energy prices continued to rise, with West Texas Intermediate crude oil surging above $ 83 per barrel, its highest level since 2014. Brent topped $ 85 per barrel, the highest since 2018.

In China, the economy slowed in the third quarter, as headwinds from a housing collapse to an energy crisis and subdued consumer spending weighed on growth. The governor of the People’s Bank of China, Yi Gang, said authorities can contain the risks posed to the Chinese economy and financial system by the struggles of the China Evergrande group.

Investors continue to worry about inflation amid an energy shortage that is driving further production cuts and pushing up bond yields. At the same time, the economic recovery remains uneven as central bankers move closer to cutting stimulus. US consumer confidence unexpectedly fell in early October, but retail sales rose.

“We’re starting to see cracks in the transient narrative we’ve been hearing for some time,” Meera Pandit, global markets strategist at JP Morgan Asset Management, told Bloomberg Radio. “Rates will continue to rise from where we are. But I don’t think from the Fed’s point of view, when you think about the short end of the curve, that they’re going to move much sooner than in 2023. They’re going to be a little more patient than the market does. is currently waiting. “

Bank of England Governor Andrew Bailey said the central bank “should act” to curb inflationary forces and warn that higher energy costs would mean price pressures will persist. Mohammed El-Erian, chief economic adviser to Allianz SE and Bloomberg columnist, said investors should prepare for increased market volatility if the Federal Reserve withdraws the stimulus measures implemented by the Covid pandemic. 19.

Among US earnings, Goldman Sachs Group Inc., Charles Schwab Corp. and Alcoa Corp. reported positive results.

Elsewhere, Bitcoin climbed back above $ 62,000 as the first US Bitcoin futures ETF could debut on Monday.

For more market analysis, read our MLIV blog.

Events to follow this week:

  • Profits are piling up, especially at AT&T Inc., Barclays Plc, Johnson & Johnson, Netflix Inc. and Tesla Inc.

  • Bank of Indonesia rate decision and briefing, Tuesday

  • China’s AFN Standing Committee begins a meeting on Tuesday that will continue until October 23. A review of anti-monopoly regulations is on the agenda

  • Housing starts in the United States, Tuesday

  • EIA Crude Oil Inventory Report, Wednesday

  • China real estate prices, preferential loan rates, Wednesday

  • U.S. Conference Board leading index, U.S. existing home sales, jobless claims, Thursday

  • Fed Chairman Jerome Powell participates in policy roundtable on Friday

Some of the main movements in the markets:

Actions

  • S&P 500 futures fell 0.1% at 11:10 a.m. in Tokyo. The S&P 500 rose 0.8%

  • Futures on the Nasdaq 100 slipped 0.3%. The Nasdaq 100 rose 0.6%

  • The Topix index fell 0.3%

  • S & P / ASX 200 index rose 0.3%

  • The Kospi index fell 0.3%

  • Hang Seng index climbed 0.6%

  • Shanghai Composite Index fell 0.7%

Currencies

  • The Japanese yen was at 114.08 per dollar, up 0.1%

  • The offshore yuan was at 6.4316 to the dollar

  • Bloomberg Dollar Spot Index rose 0.1%

  • The euro was at $ 1.1590

Obligations

Merchandise

  • West Texas Intermediate crude rose 1.3% to $ 83.34 a barrel

  • Gold was at $ 1,770.40 an ounce, up 0.2%

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