Stock rally stalls in Asia; treasury yields steady: markets wrap

A global equity rally showed signs of stalling Monday as investors weighed signs the deployment of a vaccine may be nearing against renewed US-China tensions. Treasuries were steady with the benchmark yield near its highest in nine months at just under 1%.

Asian shares traded mixed with Hong Kong stocks underperforming, while US and European contracts edged down. The S&P 500 Index notched a fresh all-time high on Friday. Testing the positive sentiment Monday was news that the US is preparing sanctions on some Chinese officials. The yen ticked higher and the dollar traded flat.

Elsewhere, oil edged lower after a fifth straight weekly advance. Australian bonds fell. The pound pared an early decline amid concern about a Brexit deal.

Investors are warming toward the prospect of more US stimulus after payrolls figures Friday showed a less-than-forecast increase. On the virus front, a senior US health official said all Americans who want a vaccine should be able to get one by the second quarter of next year and that vaccinations could begin as early as Friday.

“The deployment of vaccines is getting closer” and this is “continuing to help share markets look through the current problems with the virus and its economic impact,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd.

Here are some key events coming up:

• Thursday brings the European Central Bank policy decision and a press briefing from Christine Lagarde. Economists widely expect the central bank to increase and extend its pandemic bond-buying program.
• The US Food and Drug Administration meets to discuss the vaccine made by Pfizer/BioNTech on Thursday. If the FDA authorises emergency use, Health & Human Services Secretary Alex Azar said vaccine distribution could begin within 24 hours.

Here are the main moves in markets:

Stocks

• S&P 500 futures dipped 0.3% as of 6 a.m. in London. The gauge rose 0.9% on Friday.
• Japan’s Topix index slid 0.9%.
• Hong Kong’s Hang Seng index fell 1.5%.
• South Korea’s Kospi index rose 0.2%.
• Australia’s S&P/ASX 200 Index gained 0.6%.
• Euro Stoxx 50 futures fell 0.3%.

Currencies

• The yen was up 0.1% to 104.07 per dollar.
• The Bloomberg Dollar Spot Index was little changed.
• The offshore yuan traded at 6.5179 per dollar, little changed.
• The euro bought $1.2132, up 0.1%.
• The pound fell 0.2% to $1.3417.

Bonds

• The yield on 10-year Treasuries fell one basis point to 0.95%.
• Australia’s 10-year yield rose four basis points to 1.04%.

Commodities

• West Texas Intermediate crude dipped 0.4% to $46.09 a barrel.
• Gold was at $1,841.66 an ounce.