Sunday, September 26 2021

(Bloomberg) – Asian stocks and US futures fell on Monday amid concerns over the impact of the Covid-19 outbreaks and high inflation on the economic outlook. T-bills soared and oil slipped after an OPEC + supply deal.

Stocks fell across the region, with Japan and Hong Kong underperforming. China opened with more modest losses. The S&P 500 and Nasdaq 100 futures fell after the S&P 500 fell for the first week of four. The rally in Treasuries continued, sending 10-year yields still below 1.3%.

Oil slipped after OPEC + agreed to increase production until 2022, resolving an internal dispute that had rocked the alliance. The yen advanced and the dollar remained stable in a climate of caution.

A global equity rally has come to a halt amid debate over whether price pressures will temper the economic rebound from the pandemic, in part by prompting central banks to reduce support for monetary policy. Investors are also trying to make sense of declining Treasury yields. For some, the trend is a signal of cracks in the global recovery as the Covid-19 delta variant forces some countries to impose virus restrictions, while for others, the bond rally may have gone too far.

“The Covid backdrop is just one of many factors that can negatively impact reflation trading,” said Lori Calvasina, head of US equity strategy at RBC Capital Markets, in a note. Others include the prospect of a reduction in the Federal Reserve stimulus and an increase sooner than expected, she wrote.

Data at the end of last week showed that while retail sales remain strong in the United States, consumer confidence has unexpectedly declined as growing concerns about rising prices led to a sharp deterioration in market conditions. ‘purchase for big ticket items.

Elsewhere, the pound was generally stable with the UK government due to the lifting of remaining virus restrictions in England. At the same time, Prime Minister Boris Johnson has agreed to self-isolate after being exposed to Covid-19.

For more market commentary, follow the MLIV blog.

Here are some key events to watch out for this week:

Reserve Bank of Australia meeting minutes on Tuesday European Central Bank rate decision on Thursday Bank of Indonesia rate decision on Thursday US sales of existing homes on Thursday Tokyo Summer Olympics start on Friday

Actions

S&P 500 futures slipped 0.5% at 11:10 a.m. in Tokyo. The S&P 500 fell 0.8%. FridayNasdaq 100 futures fell 0.4%. Nasdaq 100 lost 0.8% Japan’s Topix index fell 1.6% Australian S & P / ASX 200 index fell 1% South Korea’s Kospi index slipped 1.2 % Hong Kong Hang Seng Index lost 1.9% Chinese Shanghai Composite Index fell 0.8% Euro Stoxx 50 futures fell 0.8%

Currencies

Japanese yen edged up 0.1% to 109.92 per dollar Offshore yuan was at 6.4840 per dollar Bloomberg Dollar Spot Index edged up 0.1% Euro was little changed at 1.1803 $

Obligations

10-year T-bill yield fell one basis point to 1.28% Australia’s 10-year bond yield fell five basis points to 1.23%

Merchandise

West Texas Intermediate crude fell 1.5% to $ 70.76 per barrel Gold was at $ 1,813.36 per ounce, up 0.1%

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