The dollar rose on Monday and Asian equities mixed as traders weighed the implications of higher US Treasury profitability amid President-elect Joe Biden’s push for huge fiscal aid to combat the impact of the pandemic.
The dollar rose a third day against major peers and Treasury futures were flat. Japan’s equity market is closed for holidays and cash treasures will not change until the opening in London. An indicator of Asian stocks fluctuated as South Korea narrowed after rising to 3.6%. The future S&P 500 fell.
U.S. stocks hit a record Friday after Biden said it would submit proposals this week trillion dollars in tax support to combat the economic burden of rising virus cases. Oil reduced part of last week’s jump and gold fell even further.
The equity rally has stopped earlier in the week as investors assess stretched valuations and some signs that global stocks may be running too high. Treasury stocks and yields have risen on expectations of a global recovery driven by the stimulus and eventual control of the pandemic with the help of vaccines. Higher yields could boost dollar demand.
“After being bullish for several months, we are definitely being more cautious on the stock market at these levels,” wrote Matt Maley, Miller Tabak + Co.’s chief market strategist, in a note. He added that “the dollar is very extreme overselling, hated and overdosed that everything must come together for a while soon ”.
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The Biden-led Democratic Party will control both houses of Congress once it takes office, but gaining consent for ambitious spending (such as $ 2,000 stimulus checks) can be a challenge in a Senate that will be split between 50 and 50 among Republicans. Meanwhile, President Donald Trump is entering the final days of his presidency facing a possible impeachment resolution after being accused of inciting last week’s deadly revolt at the U.S. Capitol.
Biden’s impending political tasks following his inauguration next week include handling escalating tension with Beijing. China’s state media called for retaliation after the Trump administration said the United States would remove self-imposed boundaries from diplomatic interactions with Taiwan. China claims the island as its territory.
As for the virus, Japan said it found a new strain of coronavirus with similarities to variants in the UK and South Africa. The Asian nation said it is difficult to immediately determine the extent to which the strain is infectious or the effectiveness of current vaccines against it.
Elsewhere, Bitcoin retreated from Friday’s high of about $ 42,000.
Here are some key events:
These are some of the main movements in the markets:
Stocks
- The S&P 500 futures slipped 0.7% from 13:50 in Tokyo. The S&P 500 index rose 0.6% on Friday.
- The Australian S & P / ASX 200 index fell 0.8%.
- The Kospi index in South Korea fell 0.8%.
- The Shanghai composite index fell 0.2%.
- Hong Kong’s Hang Seng index rose 0.9%.
Coins
- The Spot Bloomberg Dollar index advanced 0.5%.
- The yen fell 0.2% to $ 104.19 per dollar.
- The euro fell 0.4% to $ 1.2170.
- The pound lost 0.5% to $ 1.3499.
- Offshore yuan fell 0.4% to $ 6.47873.
Good
- The ten-year Treasury yield rose four basis points to 1.12% on Friday.
Commodities
- West Texas crude oil fell 0.9% to $ 51.78 a barrel.
- Gold fell 0.9% to $ 1,831.86 an ounce.
– With the assistance of Joanna Ossinger