Dollar Steady; Asian Stocks Set to Open Mixed: Markets Wrap

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The U.S. dollar was mixed in early Asian trading Monday and the Australian dollar fell as the nation’s state hardest hit by the coronavirus tightened a lockdown. Equity futures pointed to a muted open amid spiraling Covid-19 cases.

Infections are picking up again in some U.S. states and a senior Federal Reserve official on Sunday urged Congress to act to support Americans laid off due to the pandemic and suggested a fresh lockdown. In Australia, Victoria state tightened restrictions and declared a state of disaster as cases skyrocket, while the Philippines imposed a stricter lockdown for capital Manila and nearby areas. Friday, U.S. stocks extended their July rally amid a surge in technology shares and talks over a virus-relief package. Treasuries climbed.

Signs the economic rebound is stalling and nations are again mulling lockdowns as the virus spreads unabated might make it tougher for stocks to gain further momentum after global equities notched their fourth consecutive monthly advance in July. Deepening tensions between the U.S. and China are also likely to rein in risk appetite.

Fitch Ratings also revised its outlook on the country’s credit score to negative from stable, citing a “deterioration in the U.S. public finances and the absence of a credible fiscal consolidation plan.” The country’s ranking remains AAA.

58,406 in U.S.Most new cases today

-4% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​204 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

4.​4% Global GDP Tracker (annualized), June


The Trump administration will announce measures shortly against “a broad array” of Chinese-owned software deemed to pose national-security risks, U.S. Secretary of State Michael Pompeo said. The comments suggest a possible widening of U.S. measures beyond TikTok. President Trump on Friday said he plans to ban the video-sharing app, but the secretary of state’s comments suggest an expansion of possible targets.

These are some of the main moves in markets:

Stocks

  • The S&P 500 rose 0.8% Friday.
  • Nikkei 225 futures rose 0.5%.
  • Australia’s S&P/ASX 200 Index futures were flat.
  • Hong Kong’s Hang Seng Index futures fell 0.7% earlier.

Currencies

  • The yen rose 0.1% to 105.78 per dollar.
  • The Bloomberg Dollar Spot Index jumped 0.4% Friday.
  • The offshore yuan was at 6.9910 per dollar.
  • The euro traded little changed at $1.775.
  • The Aussie fell 0.2% to 71.31 U.S. cents.

Bonds

  • The yield on 10-year Treasuries fell two basis points to 0.53% Friday.

Commodities

  • West Texas Intermediate crude increased 0.9% to $40.27 a barrel Friday.
  • Gold strengthened 1% to $1,975.87 an ounce Friday.

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