(Bloomberg) — Most Asian stocks rose Thursday as traders bet the global recovery will be resilient to the new virus strain that is spreading around the world.
MSCI Inc.’s gauge of Asia Pacific equities advanced for a third day, led by Hong Kong and China, where policy makers have been endeavoring to shore up the economy. U.S. contracts dipped after the S&P 500 and the technology-heavy Nasdaq 100 extended a rally. European futures were steady.
China’s central bank set its reference rate for the yuan at a weaker-than-expected level against the dollar, signaling its discomfort with the currency’s recent rally. The British pound touched the lowest this year as Goldman Sachs Group Inc. pushed back its forecast for a U.K. rate hike amid the uncertainty from omicron. The dollar and crude climbed, while the 10-year Treasury yield held around 1.50%.
Pfizer Inc. and BioNTech SE said initial lab studies show a third dose of their Covid-19 vaccine may be needed to neutralize the omicron variant. Pfizer will have data telling how well its vaccine prevents infections with the omicron before the end of the year, Chief Executive Officer Albert Bourla said, adding he expects a third booster dose will “do the job” in restoring high levels of protection.
The global equity rally will be tested as traders expect more volatility until there is more clarity on the omicron variant’s threat to the economy, and ahead of U.S. consumer inflation numbers this week and a Federal Reserve meeting next week that may provide clues on the pace of tapering and interest rate increases.
“We are looking to potentially have a rise in volatility even if the market continues higher around those events next week,” said Frances Stacy, Optimal Capital portfolio strategist, on Bloomberg Television. “Many of the catalysts that gave us this boom out of Covid are slowing. And then you have the Fed potentially tapering into a decelerating economy.”
In China, factory inflation eased, suggesting there is more room for measures to support the economy. Meanwhile, the nation’s indebted developers remain under scrutiny. A group of Kaisa Group Holdings Ltd. bondholders is close to signing non-disclosure agreements with the developer in a move that would pave the way for discussions around a potential financing deal for the beleaguered firm.
On the virus front, a study found omicron is 4.2 times more transmissible than the delta variant in its early stages, while Australia is watching for the spread of omicron. The U.K. tightened rules advising people to work from home and mandating the use of so-called vaccine passports in large venues.
Bloomberg’s Markets Live team is running a survey on asset views for 2022. It’s anonymous, takes about 2 minutes, and the results will be shared in the latter part of December. To participate, click here.
Here are some key events to watch this week:
Federal Reserve Bank of Minneapolis President Neel Kashkari speaks Thursday
U.S. CPI Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 7:06 a.m. in London. The S&P 500 rose 0.3%
Nasdaq 100 futures dropped 0.1%. The Nasdaq 100 rose 0.4%
Topix index declined 0.6%
Australia’s S&P/ASX 200 Index declined 0.3%
Kospi index rose 0.9%
Hang Seng Index rose 1.1%
Shanghai Composite Index rose 1%
Euro Stoxx 50 futures gained 0.2%
Currencies
The Japanese yen rose 0.1% to 113.49 per dollar
The offshore yuan was at 6.3408 per dollar
The Bloomberg Dollar Spot Index edged up 0.1%
The euro traded at $1.1330
Bonds
The yield on 10-year Treasuries fell about two basis points to 1.50%
Australia’s 10-year bond yield rose six basis points to 1.68%
Commodities
West Texas Intermediate crude rose 0.6% to $72.77 a barrel
Gold was at $1,786.76, up 0.2%
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