Stock Market

US Futures Advance Amid China Tariff Speculation: Markets Wrap

(Bloomberg) — Asian stocks look set for a steady start Tuesday as investors evaluate the possible scrapping of some US tariffs on Chinese consumer goods.

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Futures rose for Japan and Hong Kong and were steady for Australia. The Biden administration may announce the rollback of some levies as soon as this week to counter high inflation. S&P 500 and Nasdaq 100 contracts also gained.

Reports about the potential move spurred a rally in commodity and risk currencies overnight. A dollar gauge dipped.

Australia’s dollar strengthened ahead of the central bank’s rate decision. The monetary authority — among more than 80 to have raised rates this year — is expected to implement back-to-back half-percentage point interest-rate hikes for the first time ever.

Treasury futures slipped following a retreat in European bonds. Crude climbed toward $111 a barrel. Bitcoin retook the $20,000 level.

Speculation has intensified that President Joe Biden may reduce some Trump-era tariffs on $300 billion in Chinese imports. Policy makers are under pressure to tackle inflation, which has forced interest-rates higher, sapped economic expansion and contributed to steep losses in equities and fixed income this year.

“US inflation remains exceptionally high and will require more than fiscal policy to rein in price pressures,” Carol Kong, a strategist at Commonwealth Bank of Australia, wrote in a note. “We expect the FOMC to press on with rate hikes despite mounting recession fears.”

What to watch this week:

  • Australia rate decision, Tuesday

  • PMIs for euro area, China, India among others, Tuesday

  • US factory orders, durable goods, Tuesday

  • FOMC minutes, US PMIs, ISM services, JOLTS job openings, Wednesday

  • EIA crude oil inventory report, Thursday

  • Fed Governor Christopher Waller, St. Louis Fed President James Bullard, scheduled to speak, Thursday

  • ECB account of its June policy meeting, Thursday

  • US employment report for June, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.6% as of 8:13 a.m. in Tokyo. The S&P 500 rose 1.1% Friday

  • Nasdaq 100 futures rose 0.9%. The Nasdaq 100 rose 0.7% Friday

  • Nikkei 225 futures rose 0.3%

  • Australia’s S&P/ASX 200 futures were little changed

  • Hang Seng futures added 0.6%

Currencies

  • The Bloomberg Dollar Spot Index dipped 0.1%

  • The euro was at $1.0434

  • The Japanese yen was at 135.84 per dollar

  • The offshore yuan was at 6.6923 per dollar

Bonds

Commodities

  • West Texas Intermediate crude was at $110.53 a barrel, up 2%

  • Gold was at $1,809.68 an ounce, down 0.4%

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