The dollar rose on Monday and Asian stocks were mixed as traders weighed the implications of the U.S. Treasury’s higher yields amid pressure from President-elect Joe Biden for huge fiscal aid to combat the impact of the pandemic.
The dollar rose a third day against major pairs and Treasury futures were flat. Japan’s stock market is closed for a holiday and Treasury bonds will not be traded until London opens. The Asian participation indicator fluctuated with the fall of South Korea, after a previous increase of up to 3.6%. The S&P 500 futures fell.
US stocks broke a record on Friday, after Biden said he will make proposals this week for trillions of dollars in fiscal support to combat the economic toll of rising virus cases. Oil reduced part of last week’s jump and gold fell further.
The stock recovery stopped earlier in the week, with investors evaluating stretched valuations and some signs that global stocks may be up. Treasury stocks and earnings rose with expectations of a global recovery driven by stimulus and eventual control of the pandemic with the help of vaccines. Higher yields may boost demand for the dollar.
“After being optimistic for several months, we are definitely becoming more cautious in the stock market at these levels,” wrote Matt Maley, chief market strategist at Miller Tabak + Co., in a note. He added that “the dollar is extremely oversold, hated too much and super-shorted it all, but has to recover for a while sometime soon. “
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The Democratic Party under Biden is expected to control the two houses of Congress as soon as he takes charge, but getting approval for ambitious spending – like $ 2,000 stimulus checks – can still be a challenge in a Senate that will be split 50-50 with the republicans. Meanwhile, President Donald Trump enters the final days of his presidency facing a possible impeachment resolution, after being accused of inciting last week’s deadly riot at the U.S. Capitol.
Biden’s impending political tasks after his inauguration next week include dealing with escalating tension with Beijing. China’s state media asked for retaliation after the Trump administration said the U.S. would remove self-imposed restrictions on diplomatic interactions with Taiwan. China claims the island as its territory.
On the virus front, Japan said it found a new strain of coronavirus with similarities to variants in the UK and South Africa. The Asian nation said it is difficult to determine immediately how infectious the strain is or the effectiveness of current vaccines. against her.
Elsewhere, Bitcoin retreated from Friday’s high of about $ 42,000.
Here are some important events to come:
These are some of the main movements in the markets:
Stocks
- S&P 500 futures fell 0.7% as of 1:50 pm in Tokyo. The S&P 500 index rose 0.6% on Friday.
- Australia’s S & P / ASX 200 index fell 0.8%.
- South Korea’s Kospi index fell 0.8%.
- The Shanghai Composite index fell 0.2%.
- Hong Kong’s Hang Seng index rose 0.9%.
Coins
- The Bloomberg Dollar Spot Index advanced 0.5%.
- The yen fell 0.2% to 104.19 per dollar.
- The euro fell 0.4% to $ 1.2170.
- The pound lost 0.5% to $ 1.3499.
- The offshore yuan fell 0.4% to 6.4873 per dollar.
Titles
- Yield on 10-year Treasury bills rose four basis points to 1.12% on Friday.
Commodities
- West Texas Intermediate crude fell 0.9% to $ 51.78 a barrel.
- Gold fell 0.9% to $ 1,831.86 an ounce.
– With the help of Joanna Ossinger