(Bloomberg) — Asian stocks were mixed Tuesday and Treasuries dipped as traders weighed a jump in crude oil prices following the collapse of a deal among OPEC+ leaders to boost output. A gauge of the dollar weakened.
Japanese stocks made modest gains while those in Hong Kong and China slipped. A gauge of energy stocks on the MSCI Asia-Pacific Index outperformed as oil rallied. S&P 500 futures fluctuated and Nasdaq 100 contracts fell. U.S. stocks and Treasury markets were closed Monday for the Independence Day holiday, keeping trading subdued.
OPEC+ was plunged into crisis as a worsening fight between Saudi Arabia and the United Arab Emirates blocked an oil-supply increase. The breakdown of talks has sent crude climbing toward $80 a barrel, and raises the risk of a price war if the conflict escalates.
Australia’s dollar climbed against the greenback ahead of a Reserve Bank of Australia policy decision. The central bank is expected to pare back support despite the latest curbs on activity amid a Covid-19 flareup. New Zealand’s currency outperformed major peers on speculation that an interest-rate hike could come this year.
Higher energy costs could fan the inflationary pressures that are strengthening the case for the Federal Reserve to start withdrawing emergency stimulus in the months ahead. The latest U.S. central bank minutes due Wednesday may provide further context on its hawkish pivot last month.
The risk of oil at $100 a barrel “is so correlated with short-run inflation that it will make the market very, very edgy, and we know that the Federal Reserve is both watching the economic data but also markets,” Alan Higgins, chief investment officer at Coutts & Co., said on Bloomberg Television.
Lingering concerns about China’s cybersecurity crackdown are shadowing the nation’s stock market. One of the most high-profile probes is into ride-hailing giant Didi Global Inc., which only just listed in the U.S. The saga threatens to make China’s biggest tech firms a riskier bet.
Elsewhere, the pound extended an advance after the U.K. announced plans to end social distancing and capacity limits at venues in England from July 19, saying that people must learn to live with coronavirus.
For more market commentary, follow the MLIV blog.
Here are some events to watch this week:
Reserve Bank of Australia policy decision TuesdayFOMC minutes WednesdayThe 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 little changed as of 12:51 p.m. in TokyoNasdaq 100 futures slipped 0.2%Japan’s Topix index rose 0.5%Australia’s S&P/ASX 200 Index slipped 0.2%South Korea’s Kospi index gained 0.4%Hong Kong’s Hang Seng Index fell 0.8%China’s Shanghai Composite Index dipped 0.7%
The Japanese yen traded at 110.84 per dollarThe offshore yuan was at 6.4645 per dollarThe Bloomberg Dollar Spot Index edged down 0.1%The euro was at $1.1873
Ten-year U.S. Treasury yields rose about two basis points to 1.44%Australia’s 10-year bond yield climbed two basis points to 1.45%. Three-year yields added five basis points to 0.41%
West Texas Intermediate crude rose 2.1% to $76.74 a barrelGold was at $1,797.46 an ounce, up 0.3%
More stories like this are available on bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.