(Bloomberg) -- Stocks in Asia look set to open higher Wednesday after gains in US equities and as a pullback in bond yields provided some respite for investors fretting that higher rates will slow down growth.
Futures rose in Japan, Australia and Hong Kong. US contracts slipped in early Asia trading after the S&P 500 wiped out last week’s losses with back-to-back advances. The tech-heavy Nasdaq 100 climbed with megacaps Apple Inc. and Microsoft Corp. offsetting declines in ecommerce giant Amazon.com Inc.
The long end of the Treasury curve led a rally, pushing 10-year yields below the 3% level and flattening the curve. Shorter-dated maturities lagged, weighed by weak demand at an auction. A dollar gauge dipped.
Chinese shares traded in the US climbed for a second day on increased speculation that a year-long government crackdown on the technology industry is easing.
Markets continue to be whipsawed as sentiment remains fragile with investors worrying interest rates will need to go much higher to rein in inflation and in turn stifle growth. Traders are looking to the US consumer prices reading for May due Friday to discern the Federal Reserve’s rate path and whether it will continue to hike in 50-basis point increments.
“Figuring out the direction over the next couple of months becomes increasingly difficult,” Kate Moore, head of thematic strategy for global allocation at BlackRock Inc., said on Bloomberg Television. “There seems to be across all of the investing segments a lack of strong conviction in the direction of the market. We are going to see a lot more investors remain on the sidelines, remain cautiously positioned.”
The World Bank cut its forecast for global economic expansion in 2022 further, warning that several years of above-average inflation and below-average growth lie ahead.
The European Central Bank on Thursday is set to end trillions of euros of asset purchases and cement a path to exiting eight years of negative interest rates.
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Key events to watch this week:
- Reserve Bank of India rate decision Wednesday
- OECD Economic Outlook, a twice-yearly analysis of major global economic trends and prospects for the next two years. Wednesday
- European Central Bank rate decision, Christine Lagarde briefing, Thursday
- China trade, new yuan loans, money supply, aggregate financing. Thursday
- US CPI, University of Michigan consumer sentiment Friday
- China CPI, PPI Friday
Some of the main moves in markets:
- S&P 500 futures fell 0.1% as of 7:20 a.m. in Tokyo. The S&P 500 rose 1%
- Nasdaq 100 futures lost 0.1%. The Nasdaq 100 rose 0.9%
- Nikkei 225 futures rose 0.5%
- Australia’s S&P/ASX 200 Index futures gained 0.7%
- Hang Seng Index futures added 1.2%
- The Bloomberg Dollar Spot Index was little changed
- The Japanese yen was at 132.63 per dollar
- The offshore yuan was at 6.6710 per dollar
- The euro traded at $1.0707
- The yield on 10-year Treasuries declined seven basis points to 2.97%
- West Texas Intermediate crude rose 0.2% to $119.62 a barrel
- Gold was at $1,852.67 an ounce