Asian stocks and U.S. equity futures started the week on the back foot, as investors weighed the prospects for growth against concern over inflationary pressures.

Japanese and Hong Kong shares dropped. Earlier gains vanished after trading of China Evergrande Group shares was suspended in Hong Kong, along with those of its property management unit. Mainland Chinese markets are closed through Thursday for the Golden Week holidays. Australian shares bucked the trend. U.S. futures were steady, and Europe’s rose.

The dollar steadied after two sessions of losses. Treasuries fluctuated, with 10-year yields inching up to 1.47%. The S&P 500 closed higher Friday after promising results for a Covid-19 pill and positive manufacturing data triggered a rally in companies that stand to benefit from an economic reopening. 

Asia investors are watching for further news on Evergrande, which faces a maturing bond with little wiggle room for payment. Hopson Development Holdings Ltd. — whose shares were also suspended Monday morning — plans to acquire a 51% stake in the beleaguered lender’s property-management unit for more than HK$40 billion ($5.1 billion), Cailian reported, citing unidentified people. 

The Evergrande news “has put China nerves back front and center with regional investors,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte. 

As investor fears mount about slowing economic growth, U.S. labor data at the end of the week will also be a key focus for markets. Last month global stocks posted their worst performance since March 2020 amid concern about elevated inflation, supply-chain bottlenecks, a global energy crunch and a slowdown in China.

“Markets enter the fourth quarter navigating what is perhaps the most uncertain environment of the year,” said Julian Emanuel, chief equity and derivatives strategist at BTIG LLC. “The end of 2021 is shaping up to be interesting indeed.”

Elsewhere, Bitcoin traded around $47,500, largely maintaining its recent gains. Oil traders will monitor comments from OPEC+ which meets virtually amid a spiral higher in crude prices. 

For more market analysis, read our MLIV blog.

Here are some events to watch this week:

• OPEC+ meets virtually Monday to review output policy amid a global energy crunch.
• Reserve Bank of Australia policy decision Tuesday
• Rate decision in New Zealand on Wednesday
• Reserve Bank of India monetary policy decision on Friday
• The U.S. Labor Department releases unemployment and job creation data Friday
• Annual Nobel announcements start on Monday, with the Peace Prize being awarded on Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 6:20 a.m. London time. The benchmark climbed 1.2% Friday
• Topix dropped 0.6%
• Hang Seng lost 2%
• S&P/ASX 200 gained 1.3%
• Taiex declined 0.9%
• Euro Stoxx 50 futures rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index was steady
• The euro was little changed at $1.1599
• The British pound was little changed at $1.3550
• The Japanese yen was little changed at 111.04 per dollar

Bonds

• The yield on 10-year Treasuries gained one basis point to 1.47%

Commodities

• West Texas Intermediate crude dropped 0.1% to $75.83 a barrel
• Gold rose less than 0.1% to $1,761 an ounce

Source By : https://www.bloomberg.com/news/articles/2021-10-03/asian-stocks-set-for-gains-dollar-holds-losses-markets-wrap