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  • U.S. Equity Futures Decline, Asian Stocks Mixed: Markets Wrap
    Business
    Bloomberg

    U.S. Equity Futures Decline, Asian Stocks Mixed: Markets Wrap

    (Bloomberg) -- U.S. equity futures dipped and Asian stocks were mixed Monday amid investor caution at the start of the week even as data indicated China’s economic recovery remains on track. The dollar edged up.South Korean and Taiwan shares retreated as sentiment toward chip component makers took a hit on news the Trump administration will restrict licenses to several Huawei Technologies Co. suppliers. Hong Kong and Chinese stocks saw modest gains after growth and industrial output data beat expectations. S&P 500 futures pointed lower with European equity contracts. Crude oil retreated.There is no trading of cash Treasuries due to the Martin Luther King Jr. holiday, though U.S. bond futures advanced. The S&P 500 closed lower Friday and support for Treasuries pushed the yield on 10-year notes down to around 1.08%.Global shares slipped last week after optimism about the $1.9 trillion U.S. aid package, and the so-called reflation trade, faltered into a holiday weekend. Investors are waiting for the inauguration of Joe Biden, who ascends to the U.S. presidency on Wednesday with a speech outlining how he’ll tackle the health and economic crises he inherits.“Markets needed a breather or even a pull back to justify reflationary expectations,” said Ben Emons, managing director of global macro strategy at Medley Global Advisors.Meanwhile, Janet Yellen is expected to affirm the U.S.’s commitment to market-determined exchange rates and provide assurances that the U.S. will not seek a weaker currency for competitive trade advantages, the Wall Street Journal reported, citing Biden transition officials familiar with preparation for her confirmation hearing as Treasury Secretary.U.S.-China tension continues to bubble in the last days of Donald Trump’s presidency. The U.S. government notified several Huawei suppliers that it’s revoking their licenses to work with the Chinese firm and rejecting other applications, Reuters reported, citing unidentified people familiar with the matter.On the coronavirus front, cases approached the 95 million mark, while the U.S. death toll from Covid-19 neared 400,000. Norway expressed increasing concern about the safety of the Pfizer Inc. vaccine on elderly people with serious underlying health conditions after deaths in 29 people who received inoculations.These are some key events coming up in the week ahead:U.S. equity and bond markets are shut Monday for the Martin Luther King Jr. holiday.Earnings come from companies including Bank of America, Morgan Stanley, Procter & Gamble, Intel, and Netflix.Joe Biden takes office as U.S. president on Wednesday.Policy decisions are due Wednesday from central banks in Brazil, Malaysia and Canada. The Bank of Japan and the ECB deliver decisions Thursday.Here are the main moves in markets:StocksS&P 500 futures slid 0.3% as of 12:21 p.m. in Tokyo. The index fell 0.7% on Friday.Japan’s Topix index declined 0.5%.Hong Kong’s Hang Seng rose 0.5%.South Korea’s Kospi lost 0.9%.Shanghai Composite rose 0.5%.Euro Stoxx 50 futures lost 0.3%.CurrenciesThe yen was at 103.75 per dollar, up 0.1%.The Bloomberg Dollar Spot Index climbed 0.1%.The euro bought $1.2075.The offshore yuan traded flat at 6.4825 per dollar.BondsThe yield on 10-year Treasuries ended last week at 1.08%.CommoditiesWest Texas Intermediate crude slid 0.8% to $51.93 a barrel.Gold was steady at $1,828.17 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Dollar Shorts Mount Before Yellen Outlines Market-Based Policy
    Business
    Bloomberg

    Dollar Shorts Mount Before Yellen Outlines Market-Based Policy

    (Bloomberg) -- The dollar’s downtrend may be set to resume.Hedge funds boosted net short positions in the greenback to the highest since April 2018 in the week through Jan. 12, according to data aggregated from the Commodity Futures Trading Commission. They also raised net bullish bets on the pound to the most since October while wagering on the euro and the Australian and New Zealand currencies to rise.The bets come as the world’s reserve currency enjoys a reprieve from a two-year slide after U.S. yields climbed to a 10-month high. A renewed bout of weakness in the dollar may amplify scrutiny of the incoming U.S. administration’s policy, with Treasury Secretary-designate Janet Yellen expected to declare that the authorities won’t seek a weaker currency to boost exports in her testimony on Tuesday.“The dollar is still likely to move lower over the course of the year,” Seamus Mac Gorain, head of global rates at JPMorgan Asset Management, said in an interview last week. “Many of the currencies which are more levered to global growth, particularly emerging market currencies” and the Aussie are set to strengthen, he said.The Bloomberg Dollar Spot Index has climbed over 1% since sliding to the lowest in almost three years this month. While the gains have fueled talk about a rebound, some including Goldman Sachs Group Inc. and investors in a Bank of America Corp. survey remain steadfast in forecasting a weaker greenback.“We continue to believe that the combination of high dollar valuations, low nominal and real rates, and a rapid recovery in the global economy will weigh on the greenback throughout 2021,” Goldman strategists including Danny Suwanapruti wrote in a Jan. 17 note.Yellen is expected to affirm the U.S.’s commitment to market-determined dollar value and give assurances that the U.S. won’t seek a weaker dollar for competitive trade advantage, the Wall Street Journal reported, citing President-elect Joe Biden transition officials familiar with her preparation for her confirmation hearing.The U.S. adopted a policy of favoring a “strong” dollar in 1995. While the mantra did evolve from one Treasury chief to another, no administration from then until the Trump years communicated, as the president did in 2017, that the dollar was “getting too strong.”“This is not the same as the strong-dollar policy of the past,” Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd., said of Yellen’s expected upcoming remarks. “A commitment to market-determined exchange rates implies that the new administration will be comfortable with further dollar weakness.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Business
    Reuters

    Nikkei slips on profit-taking, chip shares fall

    Japanese stock prices slid on Monday as investors took profits from recent gainers such as semiconductor-related shares following the market's rapid ascent to a three-decade high earlier this month. "The market's rally over the last month has been so fast that many people are feeling that there's a bit of over-heating here," said Takeo Kamai, head of execution services at CLSA. Investors booked profits on shares that rallied on hopes of big stimulus spending by the incoming Biden Administration in the United States.