Asia stocks to track US gains; greenback climbs

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(Sept 2): Asian stocks looked set to follow their U.S. peers higher Thursday where shares continued to set fresh records despite a setback for some tech giants. The dollar advanced.

Futures rose in Japan and Australia, though dipped in Hong Kong. S&P 500 contracts were steady after the index gained 1.5% to hit another all-time high with utilities and materials stocks leading the charge and technology shares lagging. The dollar gained the most in almost two weeks as the euro slid further below $1.20, a level it breached for the first time in more than two years Tuesday. Oil steadied after a slide, while gold held Wednesday’s retreat. Treasury yields retreated.

The global stock rally has pushed major indexes to record highs as traders bet that a flood of liquidity unleashed by central banks will make its way into equity markets. The rotation away from the tech titans that have led gains this year -- with Apple, Tesla and Zoom Video all slumping Wednesday -- could signal confidence in a broader economic recovery from the pandemic and hopes for a vaccine.

The U.S. Centers for Disease Control and Prevention has told states to prepare for a Covid-19 vaccine to be ready by Nov. 1, an aggressive goal that suggests availability just before the presidential election. Still, infectious disease expert Anthony Fauci warned of a potential surge in American cases from the coming long holiday weekend.

“We’ve seen all the major central banks stay very accommodative,” said Chris Gaffney, president of world markets at TIAA Bank. “Negative real yields across the globe are almost forcing people into finding investments that have a potential for gain.”

Elsewhere, 10-year bunds rose along with most of their sovereign peers across Europe as Germany took in 33 billion euros (US$39 billion) of orders for its first green bonds.

Here are some key events to watch this week:

    U.S. jobless claims for the week ended Aug. 29 are due Thursday.
    Eurozone retail sales data for the month of July to be released on Thursday.
    U.S. jobs report Friday is forecast to show payrolls continued to rebound in August from virus lows.

Here are the main market moves:

Stocks

    S&P 500 Index futures dipped 0.1% as of 7:17 a.m. in Tokyo. The gauge gained 1.5% on Wednesday.
    Futures on Japan’s Nikkei 225 advanced 1%.
    Hang Seng futures earlier fell 0.1%.
    Futures on Australia’s S&P/ASX 200 Index added 0.7%.

Currencies

    The Bloomberg Dollar Spot Index gained 0.2%.
    The yen was at 106.17 per dollar.
    The offshore yuan traded at 6.8356 per dollar.
    The euro bought US$1.1852.

Bonds

    The yield on 10-year Treasuries fell two basis points to 0.65%.

Commodities

    West Texas Intermediate crude rose 0.4% to US$41.66 a barrel.
    Gold slid 0.1% to US$1,940.19 an ounce.