(Bloomberg) — U.S. equity futures and Asian stocks slipped Monday as the delta virus strain hampers economic reopening and as traders await key Chinese data that may signal slower growth.
Stocks fell in Japan with smaller declines in Australia. S&P 500 and Nasdaq 100 contracts retreated. U.S. stocks eked out another record Friday but a drop in consumer sentiment to a near-decade low injected some caution, pushing down Treasury yields and the dollar, which held those losses in Asian trading.
China retail sales and industrial output numbers may show growth slowed in July amid flooding and mobility curbs to fight a virus outbreak. Beijing’s regulatory crackdown on private industries has already unnerved markets, and speculation is growing that officials could further ease monetary policy.
Investors are also tracking the fall of Afghanistan to the Taliban and the potential implications for President Joe Biden, amid alarm in Congress that the country could reemerge as a threat to U.S. national security. Biden’s economic agenda is already facing lawmaker obstacles, after some House Democrats threatened to withhold support from a $3.5 trillion budget blueprint until a bipartisan infrastructure package is signed into law.
Equities in the U.S. and Europe pushed on to all-time highs last week, bolstered by vaccine rollouts and ongoing stimulus support. But the fast-spreading delta variant and inflationary pressures remain risks. The virus is weighing more heavily on Asia, as the region struggles to accelerate inoculations. Covid-19 cases were at or near records in Thailand, Vietnam and the Philippines.
Traders will also be monitoring the Federal Open Market Committee’s latest minutes this week and a speech by Federal Reserve Chair Jerome Powell for more clues about the likely timeline for a tapering in the central bank’s $120 billion in monthly bond purchases.
“Markets are going to have to get comfortable with potential tapering from the U.S. Federal Reserve sometime next year,” Martin Lakos, Macquarie Private Bank division director, said on Bloomberg Television.
Elsewhere, Bitcoin was trading around $47,500 and the total market value of cryptocurrencies was back above $2 trillion. Crude oil slipped.
In other political developments, Canadian Prime Minister Justin Trudeau called an election for Sept. 20, and Malaysia’s Prime Minister Muhyiddin Yassin told his party he plans to resign on Monday.
Here are some events to watch this week:
China releases July industrial output, retail sales data MondayU.S. Federal Reserve Chair Jerome Powell hosts a town hall discussion with educators TuesdayChina’s top legislative body, the National People’s Congress Standing Committee, begins a four-day meeting in Beijing TuesdayU.S. retail sales are due TuesdayReserve Bank of Australia minutes are scheduled to be released TuesdayReserve Bank of New Zealand policy decision and briefing by Governor Adrian Orr WednesdayFOMC minutes released WednesdayBank Indonesia rate decision and Governor Perry Warjiyo briefing Thursday
For more market analysis read our MLIV blog.
These are the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 9:31 a.m. in Tokyo. The S&P 500 rose 0.2% FridayNasdaq 100 futures slid 0.2%. The Nasdaq 100 rose 0.3%Japan’s Topix index dropped 1.5%Australia’s S&P/ASX 200 Index shed 0.3%Hang Seng Index futures rose 0.1% earlier
Currencies
The Japanese yen traded at 109.53 per dollarThe offshore yuan was at 6.4795 per dollarThe Bloomberg Dollar Spot Index rose 0.1%The euro was at $1.1794
Bonds
The yield on 10-year Treasuries declined one basis point to 1.27%Australia’s 10-year bond yield fell five basis points to 1.17%
Commodities
West Texas Intermediate crude fell 1% to $67.79 a barrelGold was at $1,779.08 an ounce
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