Markets Wrap: Yield Curve Steepens, Asia Stocks to Open Higher

Futures in Hong Kong and Japan pointed higher, while Australia opened 0.3% higher after US equities recovered off session lows. US equities were mixed overnight, the Dow Jones Industrial Average closed at an all-time high, up 0.3%. The S&P 500 and Nasdaq Composite fell 0.09% and 0.6% respectively as financials weighed down. The S&P futures edged higher after President Joe Biden announced that 90% of the adults will be eligible for the Covid-19 vaccine next month.

The US 10-year yields rose 4 points to near 1.71% on Monday as investors eyeing further stimulus plan on infrastructure spending to be unveiled this Wednesday. US 2-year yields were steady again near 0.14%. 

Global oil traded higher on Monday as commodities traders looked into this week’s OPEC+ meeting, with speculation on maintaining the current level of production. Meanwhile, the Suez Canal reopened to traffic after the container ship was tugged free.

The dollar held its gains overnight while the yen traded at its lowest level in 1 year. The Japanese yen (USDJPY) fell against the dollar from highs near 109.37 yen per dollar to lows near 109.84 yen per dollar. EURUSD fell from highs around $1.1794 to lows near $1.1761. AUDUSD fell from highs around $0.7656 to lows near $07615. 

Metals were mixed overnight. Gold fell by 1.2% to $1712.2 an ounce. Iron ore rose by 3.9% or $6.25 to near $167.7 a tonne.

Key events this week:

  • US Infrastructure Plan (Wednesday)
  • EIA Crude Inventory Report (Wednesday)
  • AU Retail Sales and Trade Balance (Thursday)
  • OPEC Meeting (Thursday)
  • US Employment Date (Friday)

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