Asia Eyes Steady Open, Bonds Up Amid Taper Debate: Markets Wrap

(Bloomberg) — Asian stocks opened steady Thursday, following gains for U.S. shares and Treasuries as the Federal Reserve minutes showed policy makers still awaiting more evidence of a robust economic recovery to set a timeline for trimming bond purchases.

Benchmarks dipped in Japan, where another virus state of emergency for Tokyo looks imminent. Stocks edged up in Australia and South Korea. U.S. futures fluctuated after the S&P 500 and Nasdaq 100 both closed at all-time highs. Ten-year U.S. Treasury yields steadied around 1.31% after falling for seven trading days as inflation expectations continued to ease.

The Fed minutes indicated officials weren’t ready to communicate a schedule for scaling back their bond-buying program, due to high uncertainty over the course of the recovery. They did, however, want to establish a plan in case a move is needed sooner.

Traders in Asia will be closely tuned to China’s open after officials flagged the possibility of a reserve requirement ratio cut to help the economy.

The dollar held gains against a basket of major currencies. Oil stabilized after sliding as investors await further signals from the OPEC+ alliance on production plans after a breakdown in talks.

Central bank plans for their emergency-mode policy settings globally remain critical to the market outlook, especially the fate of the Fed’s $120 billion in monthly bond purchases. In Europe, policy makers agreed to raise their inflation goal to 2% and allow room for an overshoot when needed, according to officials familiar with the matter — which could give more scope for sustaining ultra-loose policy for longer.

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“I think the Goldilocks scenario will last for quite a while,” Belita Ong, chair of Dalton Investments, said on Bloomberg Television. “We are at a point where the central banks all over the world have very much a desire to keep interest rates low and fortunately we have not seen any long-term significant signs of inflation.”

For more market commentary, follow the MLIV blog.

Here are some events to watch this week:

The Group of 20 finance ministers and central bankers meet in Venice on FridayChina PPI and CPI data released on Friday

These are some of the main moves in markets:


S&P 500 futures were steady as of 9:25 a.m. in Tokyo. The S&P 500 rose 0.3%Nasdaq 100 futures edged up 0.1%. The Nasdaq 100 rose 0.2%Topix index fell 0.2%Australia’s S&P/ASX 200 Index rose 0.7%Kospin index rose 0.2%Hang Seng Index futures were little changed


The Japanese yen was at 110.55 per dollar, up 0.1%The offshore yuan was at 6.4744 per dollarThe Bloomberg Dollar Spot Index was little changedThe euro traded at $1.1794


The yield on 10-year Treasuries was at 1.31%Australia’s 10-year bond yield fell three basis points to 1.36%


West Texas Intermediate crude was at $72.22 a barrelGold was at $1,803.63 an ounce

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