Asia stocks to gain as investors focus on economy

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(June 2): Asian stocks looked set to follow U.S. shares higher Tuesday as investors focused on signs of economic recovery over further tension with China and spreading protests in America. The dollar slumped.

Futures indicated gains in Tokyo, Sydney and Hong Kong. The S&P 500 saw a modest advance Monday and the tech-heavy Nasdaq Composite outperformed as a closely watched measure of U.S. manufacturing rose in May for the first time in four months, suggesting stabilization after a pandemic-driven plunge. Risk assets shrugged off reports that Chinese officials had told agricultural companies to pause purchases of some U.S. farm goods, threatening a hard-won trade deal. Treasuries were little changed.

Global stocks are trading at a three-month high as businesses reopen around the world following coronavirus shutdowns, even with unemployment escalating. Goldman Sachs Group Inc. said the U.S. labor market is showing the earliest signs of rebounding. Euro-area data on Monday also signaled factories have started down their long road to recovery.

Investors mostly looked past the sometimes violent demonstrations across U.S. cities, over the killing of George Floyd, an unarmed black man, by police, highlighting what many see as the disconnect between Wall Street and Main Street. President Donald Trump demanded a crackdown on protests.

“Progress on the road to an economic recovery could help offset pressure on the equity market from near-term challenges stemming from geopolitical, health, and societal risks,” John Stoltzfus, chief investment strategist at Oppenheimer, wrote to clients.

Elsewhere, oil steadied as investors assessed whether OPEC and its allies will extend the supply curbs that helped drive prices higher. Gilead Sciences Inc. fell after its drug remdesivir showed only a limited benefit in a large trial.

Here are some key events coming up:

    In Europe, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases at a meeting on Thursday. Anything less than an expansion would be a big shock, Bloomberg Economics said.
    The U.S. labor market report on Friday will probably show American unemployment soared to 19.6% in May, the highest since the 1930s.

These are the main moves in markets:
Stocks

    The S&P 500 Index rose 0.4% at the close of trading in New York.
    Nikkei 225 futures rose 0.6%.
    Australia’s S&P/ASX 200 Index futures were up 0.2%.
    Hong Kong’s Hang Seng Index futures earlier rose 0.8%.

Currencies

    The Bloomberg Dollar Spot Index declined 0.7%.
    The yen traded at 107.61 per dollar.
    The offshore yuan was at 7.1284 per dollar.
    The euro was at $1.1136.

Bonds

    The yield on 10-year Treasuries rose one basis point to 0.66%.

Commodities

    West Texas Intermediate crude rose 0.2% to $35.56 a barrel.
    Gold was little changed at $1,738.05 an ounce.