Asian stocks set to advance amid US stimulus optimism

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(Oct 8): Asian stocks looked set for gains after renewed optimism that U.S. lawmakers could still reach an agreement on fiscal stimulus sent American equities and Treasury yields higher. The dollar slipped.

Futures rose in Japan, Hong Kong and Australia. U.S. contracts were little changed following the S&P 500’s 1.7% overnight advance. Nancy Pelosi signaled openness to an airline-relief bill in talks with Steven Mnuchin after President Donald Trump scuttled broader negotiations. Treasuries declined, sending the 10-year yield up to 0.79%. Tech stocks also mostly rose, even after a House panel’s proposal late Tuesday for stricter antitrust rules. Oil nudged higher after dropping in the wake of U.S. government data that showed the first crude stockpile gain in four weeks.

Minutes of the Federal Open Market Committee’s Sept. 15-16 meeting released Wednesday showed some U.S. central bankers sought further debate on the future of the Federal Reserve’s asset purchase program when they met last month, signaling they’d be open to altering or increasing bond buying going forward.

Meanwhile, signs are mounting the coronavirus is returning to the New York area, with infections reaching a three-month high. France reported a record number of new cases and Italy’s infections spiked to the highest since April. Trump said an antibody cocktail made by Regeneron was the “key” to his recovery, lifting the company’s shares in after-hours trading.

“It’s important to look through those headlines and the disruption that they’re causing and look to the potential for better growth next year and the potential for market gains possibly through the end of this year and into next year,” Tracie McMillion, global head of asset allocation strategy at Wells Fargo Investment Institute, said on Bloomberg TV.

Elsewhere, U.S. officials have stepped up behind-the-scenes talks in recent weeks about possibly restricting the expansion of Ant Group’s Alipay and Tencent Holdings Ltd.’s WeChat Pay over concerns that the digital payment platforms threaten national security.

Here are some key events coming up:

  • The U.S. Vice Presidential debate takes place in Salt Lake City on Wednesday

These are some of the main moves in markets:

Stocks

  • S&P 500 futures were little changed as of 7:20 a.m. in Tokyo. The gauge rose 1.7% on Wednesday.
  • Futures on Japan’s Nikkei 225 advanced 0.5% in Singapore.
  • Hang Seng futures earlier added 0.3%.
  • Futures on Australia’s S&P/ASX 200 Index gained 0.4%.

Currencies

  • The Bloomberg Dollar Spot Index slid 0.1%.
  • The yen was at 105.97 per dollar.
  • The offshore yuan traded at 6.7346 per dollar.
  • The euro bought US$1.1765.

Bonds

  • The yield on 10-year Treasuries rose five basis points to 0.79%.
  • Australia’s 10-year yield added two basis points to 0.86%.

Commodities

  • West Texas Intermediate crude rose 0.3% to US$40.06 a barrel.
  • Gold was at US$1,887.82 an ounce.