Asian Stock Futures Mixed; U.S. Rally Fizzles: Markets Wrap

(Bloomberg) — Asian stocks looked set for a mixed open Friday after a rally in U.S. equities fizzled on fresh U.S.-China tensions. The dollar retreated.

Futures were little changed in Japan, slipped in Australia and edged higher in Hong Kong. U.S. contracts dipped in early Asia trading. President Donald Trump said he’ll announce new U.S. policies on China on Friday, after it passed a national security law curbing freedoms in Hong Kong. The S&P 500 gave up a gain of more than 1% on the announcement, with investors speculating the action could destabilize the global economy, although the precise agenda was unclear. Treasuries were steady.

“The market’s going to trade on headlines. Could he come out and say something that might spook markets temporarily? Sure, but you know what’s more important than that? The fact that the Fed’s going to stand there with their safety-net,” David Spika, president of GuideStone Capital Management, said by phone.

The escalation in hostilities between Washington and Beijing is capping positive sentiment as traders weigh indications of economies healing after lockdowns. U.S. states’ jobless rolls shrank for the first time during the outbreak even as millions more Americans filed for unemployment benefits, while readings on durable goods orders and personal consumption beat forecasts.

Federal Reserve Bank of St. Louis President James Bullard said the economy may already have bottomed. Clues on the next stages for Fed policy may come later when Chairman Jerome Powell participates in a virtual discussion Friday.

“We are pretty positive from a risk perspective right now,” Jim Keenan, global credit co-head and chief investment officer at BlackRock Inc., said on Bloomberg TV.

The daily fixing of China’s exchange rate will be in focus again Friday. The offshore yuan steadied near a record low after China signaled with a stronger-than-expected fixing on Thursday that it wants to avoid rapid depreciation.

Elsewhere, crude oil dipped after gaining Thursday. European stocks ended higher amid optimism over economies reopening and a European Union fiscal stimulus plan.

Here are some key events coming up:

Euro-area data due Friday is forecast to show consumer inflation fell to 0.1% in May from 0.4% the previous month.

These are some of the main moves in markets:

Stocks

S&P 500 futures fell 0.2% as of 7:19 a.m. in Tokyo. The S&P 500 fell 0.2% Thursday.Futures on Japan’s Nikkei 225 were little changed.Hang Seng futures earlier rose 0.6%.Futures on Australia’s S&P/ASX 200 Index slid 0.3%.

Currencies

The Bloomberg Dollar Spot Index dipped 0.4%.The yen was little changed at 107.69 per dollar.The offshore yuan was flat at 7.1725 per dollar.The euro bought $1.1079, little changed.

Bonds

The yield on 10-year Treasuries climbed one basis point to 0.69% Thursday.

Commodities

West Texas Intermediate crude fell 0.3% to $33.60 a barrel.Gold was flat at $1,720 an ounce.

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