Stocks steady, US futures up; commodities rally: markets wrap

Asian stocks were steady Monday while US and European equity futures rose as traders weighed economic risks from the omicron virus variant as well as tighter central bank policies to fight inflation.

MSCI Inc.’s Asia-Pacific share gauge was little changed after erasing a climb. A sudden drop in the bonds of developer Shimao Group Holdings Ltd. damped the mood by renewing concerns over the health of Chinese property firms amid Beijing’s clampdown on the real-estate sector.

S&P 500, Nasdaq 100 and European futures climbed. US shares closed at a record Friday after an inflation print that was high but in line with predictions.

The Federal Reserve on Wednesday is expected to speed up stimulus withdrawal, and perhaps open the door to earlier interest-rate hikes in 2022 if price pressures stay near a four-decade peak. The 10-year US Treasury yield held near 1.48% and the dollar pushed higher.

The pound retreated after Prime Minister Boris Johnson warned the UK is facing a “tidal wave” of omicron infections. He set an end-of-year deadline for the country’s booster vaccination program.

About 20 central banks are due to hold meetings this week, including the Fed, the European Central Bank and the Bank of England. Those decisions have the potential to stir market swings, as traders evaluate the resilience of global reopening to less generous monetary settings and coronavirus challenges.

“Global equities had a solid run last week and we’ll see if the goodwill lasts into what is a behemoth when it comes to event risk,” Chris Weston, head of research with Pepperstone Financial Pty Ltd., wrote in a note. Omicron and the Fed should dictate sentiment, he added.

In cryptocurrencies, Bitcoin and Ether fell. An affiliate of Binance, the world’s biggest crypto exchange, withdrew its application for a license to run a digital-token exchange in Singapore.

Elsewhere, commodities such as oil and iron ore rallied. Some of that move came amid signs China may take steps to boost its economy — a narrative that had helped Asian stocks earlier Monday before sentiment turned more mixed.

China’s top decision makers last week signaled policies may become more supportive of growth next year. Economists predict China will start adding fiscal stimulus in early 2022.

In Turkey, the lira fell below 14 per dollar, hitting new all-time lows, after S&P Global Ratings lowered the outlook on the nation’s sovereign credit rating to negative.

Bloomberg’s Markets Live team is running a survey on asset views for 2022. It’s anonymous, takes about 2 minutes, and the results will be shared in the latter part of December.

Here are some key events this week:

• The US Federal Open Market Committee starts its two-day policy meeting. Tuesday
• China releases November industrial output, retail sales data. Wednesday
• FOMC rate decision and Powell news conference. Wednesday
• Rate decisions from Indonesia, Philippines, Mexico, Bank of England, European Central Bank (Christine Lagarde briefing), Norway, Switzerland, Taiwan, Turkey. Thursday
• Markit manufacturing PMI: Eurozone, France, Germany, UK, Australia. Thursday
• Rate decisions from Colombia, Japan, Russia. Friday

Stocks

• S&P 500 futures rose 0.3% as of 7:09 a.m. in London. The S&P 500 rose 1% Friday
• Nasdaq 100 futures rose 0.3%. The Nasdaq 100 rose 1.1%
• Japan’s Topix index rose 0.1%
• Australia’s S&P/ASX 200 Index advanced 0.4%
• South Korea’s Kospi index dipped 0.3%
• Hong Kong’s Hang Seng Index was flat
• China’s Shanghai Composite Index rose 0.4%
• Euro Stoxx 50 futures climbed 0.4%

Currencies

• The Japanese yen traded at 113.55 per dollar
• The offshore yuan was at 6.3668 per dollar
• The Bloomberg Dollar Spot Index rose 0.2%
• The euro traded at $1.1284

Bonds

• The yield on 10-year Treasuries was at 1.48%
• Australia’s 10-year bond yield was at 1.60%, down three basis points

Commodities

• West Texas Intermediate crude rose 1.4% to $72.67 a barrel
• Gold was at $1 784.49 an ounce, up 0.1%