Stocks, Futures Weather Focus on Fed Downside Risk: Markets Wrap

(Bloomberg) – Asian stocks were flat on Thursday and yields on Treasuries rose as traders weighed the Federal Reserve minutes that signaled the possibility of a debate on reducing asset purchases. Raw materials remained under pressure.

Stocks fluctuated in Japan, took losses in Hong Kong and China, and rose in Australia. US futures fell slightly after the S&P 500 pulled out for a third day. The Nasdaq 100 edged up slightly, boosted by late-day gains in tech stocks including Facebook Inc. European contracts were in the green.

The minutes said some Fed officials may be open “at some point” to discuss adjustments to the pace of massive bond purchases if the US economy continues to grow rapidly. The yield on benchmark 10-year Treasury bills remained stable after climbing to 1.67%. A dollar gauge stood on a rally.

Commodities slipped amid concerns about inflation, potential brakes on monetary stimulus and China’s efforts to contain commodity prices. Volatility swept through cryptocurrencies, with Bitcoin posting a same-day drop and a rally of around 30% on Wednesday. The sector was more stable on Thursday.

Shares have lost steam in recent sessions over concerns about inflation and a resurgence of Covid-19 in some countries. Speculative ardor is also on the decline, highlighted more recently by the gyrations of digital tokens. Any hint of a timeline to cut back on the one-time stimulus could exacerbate these trends, even as U.S. policymakers have signaled their intention to maintain an accommodative stance for an extended period.

“It was a surprise to hear about the Fed cut,” Joyce Chang, president of global research for JPMorgan, told Bloomberg TV. “The market thought it might be a few months before you really saw this particular problem focus.” Nonetheless, Chang said now is not the time to bet against the broader fundamentals right now on growth prospects.

Oil was little changed after falling to a three-week low, with traders also concerned about increased supply from the United States and Iran.

Here are some key events from this week:

IMF Managing Director Kristalina Georgieva and ECB President Christine Lagarde speak at the Vienna Economic Dialogue on Thursday. Eurozone finance ministers and central bank heads hold an informal meeting. A larger group of EU finance ministers and central bank heads will meet on May 22

Here are some of the main movements in the markets:

Stocks

S&P 500 futures fell 0.1% at 12:30 p.m. in Tokyo. The index fell 0.3% Nasdaq 100 contracts lost 0.1%. The index rose 0.2% The Japanese Topix index rose 0.2%. Australian S & P / ASX 200 index added 1% South Korea’s Kospi index fell 0.5% Hong Kong’s Hang Seng index fell 0.8% Composite index of China’s Shanghai fell 0.3%

Currencies

The Japanese yen was at 109.14 per dollar, up 0.1% Offshore yuan was trading at 6.4386 per dollar Bloomberg Dollar Spot Index dipped less than 0.1% The euro was $ 1.2181

Obligations

The 10-year Treasury bond yield edged down to 1.66% Australian 10-year bond yield fell one basis point to 1.76%

Basic products

West Texas Intermediate was flat at $ 63.41 per barrel after falling 3.3% Gold was at $ 1,876.26 per ounce

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