(Bloomberg) — Asian stocks looked set for a mixed start Friday amid easing concerns over the omicron virus strain but hurdles for Chinese technology firms. Treasury yields rose after comments from Federal Reserve officials.
Futures pointed higher for Japan and Australia but Hong Kong’s slipped after a slide in Chinese shares traded in the U.S. over the risk of delisting for flouting disclosure rules. Dip buyers bolstered U.S. stocks sensitive to the economic outlook, fueling the S&P 500’s best day since October in a choppy week.
Treasuries slid and the yield curve flattened after more Fed officials laid out the case for a faster removal of policy support to curb high inflation. The dollar was little changed.
In the oil market, OPEC+ proceeded with a scheduled output hike but left room for quick adjustments if the pandemic changes the outlook. Crude advanced.
Volatility in financial markets remains elevated, reflecting the Fed’s shift toward less generous monetary settings and uncertainty about how the omicron outbreak will affect global reopening. Some worries about the new strain have receded in the hope that vaccines will remain effective or can be adjusted.
“The environment in markets is changing,” Steven Wieting, chief investment strategist at Citigroup Private Bank, said on Bloomberg Television. “Monetary policy, fiscal policy are all losing steam. It doesn’t mean a down market. But it’s not going to be like the rebound, the sharp recovery that we had for almost every asset in the past year.”
Fed Governor Randal Quarles, Atlanta Fed President Raphael Bostic and his San Francisco counterpart Mary Daly explained the rationale for tapering bond purchases more rapidly. That reinforced a similar message from Chair Jerome Powell this week.
Treasury Secretary Janet Yellen said she understands the “reasoning” behind the central bank’s plans to reduce asset purchases.
In the latest U.S. data, jobless claims remained low, suggesting additional progress in the job market. Traders are awaiting the payrolls report Friday, which could shape expectations for the pace of Fed policy tightening.
Meanwhile, the U.S. Securities and Exchange Commission on Thursday announced its final plan for putting in place a new law that mandates foreign companies open their books to U.S. scrutiny or risk being kicked off the New York Stock Exchange and Nasdaq within three years.
China and Hong Kong are the only two jurisdictions that refuse to allow the inspections despite Washington requiring them since 2002.
Elsewhere, Grab Holdings Ltd., Southeast Asia’s biggest ride-hailing and delivery company, sank in its first day of U.S. trading after completing its merger with Altimeter Growth Corp., the largest deal yet for a special-purpose acquisition company.
Key events to watch this week:
- U.S. jobs report, factory orders, durable goods on Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
- The S&P 500 rose 1.4%
- The Nasdaq 100 rose 0.7%
- Nikkei 225 futures increased 0.7%
- S&P/ASX 200 futures climbed 0.7%
- Hang Seng futures fell 0.7%
- The Bloomberg Dollar Spot Index was little changed
- The euro was at $1.1301
- The Japanese yen was at 113.18 per dollar
- The offshore yuan was at 6.3732 per dollar
- The yield on 10-year Treasuries advanced four basis points to 1.44%
- West Texas Intermediate crude rose 1.4% to $66.50 a barrel
- Gold was at $1,768.80 an ounce
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