Asia Stocks to Track U.S. Higher, Oil Loses Gains: Markets Wrap

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(Bloomberg) — Asian stocks followed their U.S. peers higher amid progress on vaccine distribution and an end to some restrictions for banks. Oil reversed its rally.

Shares opened higher in Japan and gains across the region lifted MSCI Inc.’s Asia Pacific gauge. U.S. contracts climbed after modest gains in the S&P 500 Index and a rally in small-cap stocks, as President Joe Biden doubled his target for administering Covid-19 vaccines. Banks extended gains in after-hours trading as the Federal Reserve announced firms that clear stress tests can raise dividends after June 30.

U.S. 10-year yields rose slightly after another lackluster auction of seven-year notes. The reaction was muted compared with the upheaval in bonds and interest-rate sensitive stocks following poor demand at last month’s sale. The U.S. dollar headed for its best week in three.

West Texas Intermediate crude erased the week’s gains to trade below $60 a barrel, as a strengthening dollar and mounting lockdowns in Europe blunted the potential impact of crude cargoes backing up outside the blocked Suez Canal.

Global equities remain just under record highs as investors assess progress in the fight against Covid-19 and mull the risks of inflation from heavy stimulus. The U.S. recovery looks on track with latest data showing a bigger-than-forecast drop in weekly jobless claims. Traders are also weighing U.S.-China tensions, as President Biden highlighted the rivalry between the two largest economies and declined to comment on whether import tariffs would remain in place.

“The markets are stuck in a lull where they are still taking some direction from the move in interest rates,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “At this point we’re trying to get some more news globally that will be the next catalyst.”

Elsewhere, Bitcoin slumped to trade around $52,000. U.S. personal income and spending data on Friday are the next key numbers to watch.

These are some of the main moves in financial markets:

Stocks

S&P 500 futures rose 0.3% as of 9:10 a.m. in Tokyo, after the index rose 0.5%.Nasdaq 100 futures gained 0.3% after the index dipped 0.1%.Japan’s Nikkei 225 Index climbed 1.7%.Australia’s S&P/ASX 200 Index rose 0.6%.Hang Seng Index futures rose 0.4%.

Currencies

The Bloomberg Dollar Spot Index slipped 0.1%, headed for a weekly gain.The euro was up 0.1% at $1.1777.The British pound was 0.2% higher at $1.3754.The Japanese yen traded at 109.20 per dollar.

Bonds

The yield on 10-year Treasuries was steady at 1.62%.Australia’s 10-year yield was down two basis points at 1.66%.

Commodities

West Texas Intermediate crude gained 0.4% to $58.98 a barrel.Gold was steady at $1,729.04 an ounce.

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