Stocks Steady Amid Commodity Rally as CPI Awaited: Markets Wrap

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(Bloomberg) — Asian stocks were steady Tuesday after the U.S. snapped a five-day drop ahead of inflation data that could impact expectations of the likely timeline for a reduction in Federal Reserve stimulus.

Japan’s Nikkei 225 Stock Average edged up and was on track for its highest close since 1990. South Korea climbed but Australia slipped. U.S. contracts fluctuated after energy firms bolstered the S&P 500 overnight. Treasury yields held a retreat and the dollar was little changed.

Commodities have surged to a 10-year high, with materials from aluminum to steel rallying and European gas and power hitting records. The escalating cost pressures come as traders await a report expected to show an annual pace of U.S. inflation of 5% or more for a fourth month.

Chinese technology shares listed in the U.S. declined for a fourth day on Beijing’s regulatory crackdown. The debt crisis at China Evergrande Group will be closely watched amid mounting protests by homebuyers, retail investors and employees. The developer said it hired financial advisers to assess its capital structure.

Global stocks have been buoyed this year by robust earnings reports and a rapid recovery from the pandemic-induced recession. The rally stalled in recent weeks on the hit to economic reopening from the delta virus strain and risks from elevated inflation, which has been stoked partly by supply disruptions.

“Investors don’t want to have massive positions before the inflation data as the risks are to the upside as Covid inflation continues to hamper supply chains,” Edward Moya, a senior market analyst at Oanda, said in a note. “If inflation comes in hotter-than-expected, taper expectations could shift from December to November.”

Elsewhere, oil rose for a third day as investors tracked a storm menacing the Gulf of Mexico just weeks after Hurricane Ida cut local production. Bitcoin was trading at around $45,000.

Here are some events to watch this week:

U.S. consumer-price index, TuesdayApple product-launch event, TuesdayChina retail sales, property prices, industrial production, WednesdayQuadruple witching day for U.S. markets, Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.1% as of 9:26 a.m. in Tokyo. The S&P 500 rose 0.2%Nasdaq 100 contracts added 0.1%. The Nasdaq 100 was little changedTopix index rose 0.4%Australia’s S&P/ASX 200 Index fell 0.4%Kospi index gained 0.7%Hang Seng Index futures rose 0.2% earlier

Currencies

The Japanese yen was little changed at 109.97 per dollarThe offshore yuan was at 6.4445 per dollarThe Bloomberg Dollar Spot Index was little changedThe euro traded at $1.1809

Bonds

The yield on 10-year Treasuries was at 1.32%Australia’s 10-year bond yield fell two basis points to 1.25%

Commodities

West Texas Intermediate crude rose 0.1% to $70.54 a barrelGold was at $1,792.85 an ounceThe Bloomberg Commodity Spot Index gained 0.6% to reach a fresh 10-year high

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