Asia Stocks Set to Follow U.S. Lower: Bonds Jump: Markets Wrap

Asian stocks looked set to follow their U.S. counterparts lower Friday as a resurgence in coronavirus cases added to concern that tougher restrictions may slow down the economic recovery without further stimulus. Treasuries jumped.

Futures pointed to modest losses in Japan and Hong Kong, while Australian stocks dipped. The S&P 500 fell 1% as New York City prepared for the possibility of closing its schools whileChicago urged residents to stay at home. Meantime, the Trump administration isstepping back from talks on a relief package and leaving it up to Congress to revive negotiations with House Speaker Nancy Pelosi, according to people familiar. Benchmark 10-year Treasury yields fell back below 0.90% and the dollar ticked higher.

Investors got a further reminder of the risks to the recovery after three of the world’stop central bankers warned that the prospect of a vaccine isn’t enough to put an end to the economic challenges created by the pandemic. The U.K. reported record infections despite a tightened lockdown and hospitalization rates set a new high in France.

“We’re experiencing a bit of exhaustion for the market as we focus on the troubling near-term Covid trends and the potential for a few tough months ahead,” said Yousef Abbasi, global market strategist at StoneX.

In the Philippines, equity trading will resume though bond and foreign exchange markets will remain shut due to a typhoon.

These are some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.2% as of 8:01 a.m. in Tokyo. The gauge dropped 1% on Thursday.
  • Futures on Japan’s Nikkei were little changed in Singapore.
  • Hang Seng futures earlier slid 0.2%.
  • Australia’s S&P/ASX 200 Index fell 0.2%.

Currencies

  • The Bloomberg Dollar Spot Index climbed 0.1%.
  • The euro bought $1.1805.
  • The offshore yuan was at 6.6138 per dollar.
  • The yen was at 105.102 per dollar.

Bonds

  • The yield on 10-year Treasuries declined 10 basis points to 0.88%.

Commodities

  • West Texas Intermediate crude dipped 0.6% to $40.86 a barrel.
  • Gold was at $1,876.87 an ounce.

— With assistance by Claire Ballentine, Benjamin Purvis, and Elizabeth Stanton

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