Markets: Asian stocks set to rise on easing inflation fears

Futures pointed higher in Japan, Australia and Hong Kong. PHOTO: AFP

(BLOOMBERG) - Asian stocks look set to rise Tuesday (May 25) after technology shares spurred a Wall Street rally as Federal Reserve officials sought to soothe concerns about inflation.

Bitcoin surged following last week's crypto rout, in part on Elon Musk's support for an apparent effort to improve its green credentials.

Futures pointed higher in Japan, Australia and Hong Kong.

United States contracts edged up after the S&P 500 climbed and the Nasdaq 100 outperformed amid a jump in Apple, and Tesla.

The Fed comments aided investor sentiment, as officials reiterated that they expect transitory rather than lasting price pressures from the US economic reopening.

Benchmark 10-year Treasury yields and the dollar retreated.

Oil held gains after Iran said that gaps remain in negotiations aimed at reaching a deal to end US sanctions on its crude. The Bloomberg Commodity Spot Index advanced the most in about a week.

Fed officials Lael Brainard, Raphael Bostic and James Bullard said they wouldn't be surprised to see bottlenecks and supply shortages push prices up in coming months as the pandemic recedes, but that much of those gains should prove temporary.

While market-based measures of inflation expectations have dipped, investors remain cautious about price pressures as well as Covid-19 spikes, for instance in Asia.

"Inflation is a key focus for investors, meaning uncertainty over what happens to interest rates," AXA Investment Managers chief investment officer of core investments Chris Iggo wrote in a note.

"Yield curves have stabilised, but it is not clear that renewed inflation concerns automatically mean steeper curves."

Here are some events this week:

- Bank of Indonesia rate decision Tuesday, Reserve Bank of New Zealand policy decision Wednesday, Bank of Korea rate decision Thursday.

- CEOs of the largest US banks, including JPMorgan and Goldman Sachs, will testify before lawmakers in the Senate Banking and House Financial Services committees Wednesday.

- US initial jobless claims, GDP, durable goods, pending home sales on Thursday.

These are some of the main moves in markets:


- S&P 500 futures rose 0.2 per cent. The index added 1 per cent.

- Nasdaq 100 contracts increased 0.2 per cent. The gauge added 1.7 per cent.

- Nikkei 225 futures climbed 0.5 per cent

- Australia's S&P/ASX 200 index futures gained 0.3 per cent

- Hang Seng index futures rose 0.3 per cent


- The Japanese yen was at 108.80 per US dollar

- The offshore yuan traded at 6.4119 per US dollar

- The Bloomberg Dollar Spot Index was steady

- The euro was at US$1.2216 (S$1.6256)


- The yield on 10-year Treasuries declined two basis points to 1.60 per cent


- West Texas Intermediate crude was steady at US$66 a barrel

- Gold was little changed at US$1,881.24 an ounce

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