The dollar rose Monday and Asian stocks were mixed as traders weighed the implications of higher yields on US Treasuries amid President-elect Joe Biden’s push for massive fiscal help to combat the impact of the pandemic.
The dollar climbed a third day against major competitors and Treasury futures were flat. The Japanese stock market is closed for a holiday and cash Treasuries will not start trading until London opens. An Asian stock meter fluctuated as South Korea fell after an earlier increase of no less than 3.6%. S&P 500 futures were down.
US stocks hit a record Friday after Biden said he will make proposals for it this week trillions of dollars in fiscal aid to combat the economic toll of rising virus cases. Oil narrowed part of last week’s jump and gold fell further.
The equity rally has paused at the beginning of the week as investors evaluate overvalues and some signs that global stocks may be getting too hot. Stock and treasury yields rose on expectations of a global recovery, driven by stimulus and possible pandemic containment through vaccines. Higher yields could boost demand for the dollar.
“After being bullish for several months, we are certainly becoming more cautious in the stock market at these levels,” Matt Maley, the chief market strategist at Miller Tabak + Co., wrote in a note. He added that the “dollar is so extreme oversold, too much hated and too short that it should all only last a while at some point. “
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The Democratic Party under Biden is ready to control both houses of Congress as soon as he takes charge, but winning approval for ambitious spending – like $ 2000 stimulus checks – could still be a challenge in a Senate that will split 50-50 Republicans. . Meanwhile, President Donald Trump is entering the final days of his presidency and facing a possible impeachment resolution after being blamed for instigating last week’s deadly riot in the Capitol.
Biden’s looming policy post following his inauguration next week includes dealing with escalating tensions with Beijing. Chinese state media called for retaliation after the Trump administration said the US will removing self-imposed inhibitions on diplomatic interactions with Taiwan. China claims the island as its territory.
As for the virus, Japan said it has found a new strain of the coronavirus with similarities to the UK and South Africa variants. The Asian nation said it is difficult to immediately determine how contagious the strain is or the effectiveness of current vaccines against it.
Elsewhere, Bitcoin pulled back from Friday’s high of around $ 42,000.
Here are some important events coming up:
These are some of the main movements in markets:
Shares
- S&P 500 futures are down 0.7% from 1:50 PM in Tokyo. The S&P 500 index rose 0.6% on Friday.
- The Australian S & P / ASX 200 index fell 0.8%.
- South Korea’s Kospi index fell 0.8%.
- The Shanghai Composite Index fell 0.2%.
- The Hang Seng index in Hong Kong rose 0.9%.
Currencies
- The Bloomberg Dollar Spot Index rose 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.
Bonds
- The yield on 10-year government bonds rose four basis points to 1.12% on Friday.
Raw materials
- West Texas Intermediate crude oil fell 0.9% to $ 51.78 a barrel.
- Gold fell 0.9% to $ 1,831.86 an ounce.
– With the help of Joanna Ossinger