Stocks, US equity futures climb as dollar retreats: markets wrap

Asian stocks and US equity futures advanced Friday as investors assessed whether monetary tightening to tackle inflation in the US and Europe is getting closer to being priced in.

Equities rose in Japan and Australia in the wake of modest Wall Street gains that left the S&P 500 above 4,000 for the first time since late August. Shares in Hong Kong rebounded on short covering ahead of a long weekend in China.

Mainland stocks also climbed, with an unexpected moderation of consumer inflation in August giving policy makers in Beijing more room to support the economy.

The euro advanced to the highest level in more than a week after the European Central Bank raised rates 75 basis points Thursday. Bets the Federal Reserve will hike by the same margin when it meets later this month increased after chair Jerome Powell reiterated the Fed is determined to curb price pressures.

The yen headed for its best day in a month as traders mulled currency comments from the Bank of Japan Governor Haruhiko Kuroda.

Treasuries held their retreat overnight, leaving the policy-sensitive two-year yield near the highest since 2007. Australian and New Zealand bonds fell. The Bloomberg Dollar Spot Index slipped but remained in sight of a record high. Oil rose toward $84 a barrel and gold climbed.

Global stocks are on course for their first weekly advance in four, a small measure of respite from the bear-market omens circling markets due to monetary tightening, energy woes and China’s growth slowdown.

“The markets have finally digested the fact that rates are almost certain to go up by 75 basis points when the Fed moves next,” JoAnne Feeney, partner and portfolio manager for Advisors Capital Management, said on Bloomberg TV.

“What we are seeing though is some recognition that perhaps the sell-off that we saw in the second half of August was a bit overdone,” she said.

Speaking at a conference, Powell said “we need to act now, forthrightly, strongly as we have been doing” and added that “my colleagues and I are strongly committed to this project and will keep at it.”

Greenback strength amid tightening US monetary settings is saddling nations around the world with complications from currency weakness. In Japan, officials gave the strongest hint yet at possible direct market intervention. The yen edged up.

The gyrations in markets are being overshadowed Friday by the death of Queen Elizabeth II, whose passing prompted an outpouring of condolences from around the world.

Some of the main moves in markets:

Stocks

• S&P 500 futures gained 0.4% as of 1:46 p.m. in Tokyo. The S&P 500 rose 0.7%
• Nasdaq 100 futures rose 0.6%. The Nasdaq 100 rose 0.5%
• Japan’s Topix index gained 0.4%
• Australia’s S&P/ASX 200 edged up 0.6%
• Hong Kong’s Hang Seng index jumped 2.6%
• China’s Shanghai Composite gained 0.7%
• Euro Stoxx 50 futures rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index slid 0.6%
• The euro strengthened 0.8% to $1.0074
• The Japanese yen jumped 1% to 142.73 per dollar
• The offshore yuan was at 6.9382 per dollar

Bonds

• The yield on 10-year Treasuries fell three basis points to 3.29%
• The yield on Australia’s 10-year bond traded flat at 3.56%

Commodities

• West Texas Intermediate crude rose 0.5% to $83.89 a barrel
• Gold was rose 0.7% to $1 720.27 an ounce