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GLOBAL MARKETS-Asian markets eye muted start on economic hopes, pandemic fears

Pete Schroeder
·2 min read

By Pete Schroeder

Feb 18 (Reuters) - Asian markets were set for sideways tradeat Thursday's open as lingering pandemic concerns pushed againststronger economic data, and with little firm direction from WallStreet.

Australia's benchmark S&P/ASX 200 index was down0.1% in early trading, while Japan's Nikkei 225 futureswere up 0.05%. Hong Kong's Hang Seng index futureswere down 0.2%.

The MSCI's global stock index was up 0.04%.

Strong retail sales out of the United States, coupled withnew indications the Federal Reserve will maintain itsaccommodative stance and an ongoing push for further U.S.stimulus, helped drive expectations the world's largest economywill continue to post gains coming out of the pandemic.

But concern at the rapid spread of new variants temperedenthusiasm.

"With an even larger stimulus package likely to be passed byCongress before the end of March, the U.S. economic recoverycould gain more momentum in 2021," wrote Commonwealth Bank ofAustralia currency analyst Carol Kong.

"Despite the recent positive vaccine developments, theglobal economic outlook remains uncertain partly because of thespreading virus variants."

On Wall Street, technology stocks faced some pressure oninflation concerns, driving down the Nasdaq while othercompanies rose on broader economic optimism.

The Dow Jones Industrial Average rose 0.29%, whilethe S&P 500 lost 0.03% and the Nasdaq Compositedropped 0.58%.

But while investors eyed inflation, minutes from the JanuaryFed meeting showed policymakers willing to push furtheraccommodation to boost the pandemic-scarred U.S. economy.

Persistent optimism spread to the U.S. dollar, which roseagainst other currencies. The dollar index, a measure of thecurrency's strength against six other major currencies was last0.25% higher.

The risk-on appetite was also apparent in bitcoin, whichcontinued its upward march to exceed $52,000 amid signs it maybe gaining more mainstream acceptance.

An ongoing deep freeze in Texas continued to drive up oilprices, as the unusually cold weather hampered output at thelargest U.S. crude producing state. Brent crude gained1.6%, while U.S. West Texas Intermediate (WTI) crudesettled up 1.8%, both levels not seen since January 2020.

Safe-haven U.S. Treasury yields were down slightly Wednesdayamid the stronger economic data. The benchmark 10-year yield, which touched 1.333%, its highest level since Feb.27, 2020, later dropped to 1.2720%. The 30-year U.S. yield alsodropped.

Spot gold edged 0.2% lower to $1,815.80 per ouncepressured by higher benchmark U.S. Treasury yields. U.S. goldfutures fell 0.4% to $1,815.70 per ounce.

(Reporting by Pete Schroeder; editing by Richard Pullin)