Equities Rise, Dollar Falls Amid China Covid Shift: Markets Wrap

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(Bloomberg) — Equities and crude oil climbed Tuesday while the dollar declined amid positive sentiment from China’s rollback of Covid isolation measures and the cooling of a key inflation measure in the US.

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Japanese and South Korean shares opened higher and futures contracts for US stocks rose about 0.6%. Oil jumped around 1.5%, supported by the outlook for demand in China and as freezing weather across the US prompted refinery closures.

The offshore yuan was steady after advancing overnight on China’s announcement that it would drop quarantine for inbound travelers early next month. A gauge of dollar strength declined.

Yields on US Treasuries were little changed as they resumed trading after the benchmark 10-year rate rose the most last week since early April, ending around 3.75%.

Investors are taking encouragement from data on Friday that showed the Federal Reserve’s closely watched measure of inflation cooling and consumer spending stagnating. Still, price pressures from the tight labor market remain a concern for the Fed and a challenge to bets that interest rates will be cut next year.

Benchmark equity indexes for mainland China, Japan, India and South Korea climbed on Monday. Most other key markets in the region including Hong Kong, Singapore and Australia were shut. Hong Kong and Australia remain closed Tuesday.

Key events this week:

  • China industrial profits, Tuesday

  • US wholesale inventories, Tuesday

  • BOJ summary of opinions of Dec. 19-20 meeting, Wednesday

  • US initial jobless claims, Thursday

  • ECB publishes economic bulletin, Thursday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.6% as of 9:20 a.m. Tokyo time

  • Nasdaq 100 futures rose 0.7%

  • Japan’s Topix index rose 0.4%

  • South Korea’s Kospi index rose 0.5%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3%

  • The euro was little changed at $1.0646

  • The Japanese yen rose 0.2% to 132.67 per dollar

  • The offshore yuan was little changed at 6.9707 per dollar

  • The Australian dollar rose 0.3% to $0.6747

Cryptocurrencies

  • Bitcoin rose 0.6% to $16,926.85

  • Ether rose 0.9% to $1,227.16

Bonds

  • The yield on 10-year Treasuries was little changed at 3.74%

  • Japan’s 10-year yield advanced one basis point to 0.445%

Commodities

  • West Texas Intermediate crude rose 1.5% to $80.77 a barrel

  • Spot gold rose 0.3% to $1,802.96 an ounce

This story was produced with the assistance of Bloomberg Automation.

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©2022 Bloomberg L.P.

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