Stock rally ebbs as commodities dip; dollar advances

Bloomberg

Most Asian stocks slipped on Tuesday along with US and European equity futures as investors weighed the impact of the recent climb in bond yields and a Chinese official’s warning about asset bubbles. The dollar rises.
Shares in China and Hong Kong led the regional decline. S&P 500 and Nasdaq 100 futures turned lower. China is “very worried” about bubbles in overseas financial markets, China Banking and Insurance Regulatory Commission Chairman Guo Shuqing said at a briefing. Treasury yields were steady.
Guo also said he’s worried about risks in China’s property sector, sparking fresh concerns about further tightening in the world’s second biggest economy.
Oil retreated to trade just below $60 a barrel ahead of a key Opec+ meeting this week. Metals including copper, silver and gold slid. In Australia, bond yields rise after the central bank left its asset purchase plan unchanged.
Investors continue to debate whether many markets are over-extended following huge stimulus injections to counter the impact of the pandemic. The prospect of faster inflation as the world economy recovers has led to concerns that monetary policy may have to be tightened sooner than expected. That’s pushed up sovereign bond yields this year.
“There’s lot of uncertainty, a lot of risks being built in, that’s why you’re seeing a bit of skittishness,” said Lorraine Tan, Morningstar director of Asia equity research. “The positive tailwind for the market is still going to be the global economic recovery.”
Bitcoin rallied after a volatile weekend session as Citigroup Inc. laid out a case for the digital asset to play a bigger role in the global financial system.
S&P 500 futures fall 0.4% as of 5:45 am in London and the S&P 500 Index surged 2.4%. While Japan’s Topix index was down 0.6%, Australia’s S&P/ASX 200 index falls 0.4% and South Korea’s Kospi index rise 0.7%.
While Hong Kong’s Hang Seng Index falls 1.2%, Shanghai Composite Index fall 1.4% and euro Stoxx 50 futures lost 0.3%.
The yen traded at 106.85 per dollar and the offshore yuan was at 6.4814 per dollar, down 0.2%. The Bloomberg Dollar Spot Index rises 0.2% and the euro was at $1.2020, down 0.2%.
While the yield on 10-year Treasuries held at 1.41%, Australia’s 10-year bond yield rose five basis points to 1.72%. West Texas Intermediate crude declined 1.4% to $59.77 a barrel and gold dipped 0.7% to $1,713 an ounce.