Asian Markets Rise, Eagerly Awaits Wall Street Earnings

12/07/2021 Equities markets in Asia-pacific bounced on Monday after Wall Street hit a high despite jitters about the spread of the coronavirus’s delta variant as investors looked ahead to U.S. earnings reports. Shares in Japan outperformed regional peers, while Australia advanced despite a prolonged lockdown in Sydney. Hong Kong’s Hang Seng also firmly in the green this morning, however Tencent sliding 2.1% as China’s antitrust regulator ordered the music streaming arm of Tencent Holdings Ltd to give up exclusive rights to music labels. U.S. and European futures fluctuated. Treasury yields stabilized after jumping Friday. The dollar inched up against major peers.

Gold down ahead of U.S. inflation data and Powell Testimony: concerns about COVID-19 outbreaks remain as countries including Australia and South Korea reintroduce restrictive measures, while U.S. inflation data and testimony from U.S. Fed. Chair. Powell, are due throughout the week. Gold futures were down 0.43% to $1,803.68, albeit climbed above the $1,800 mark.

Oil Down, Investors Still Await Outcome of OPEC+ Output Dispute: Oil was down on Monday morning. Supplies remained tight as key producers continue to disagree on whether to increase output from August onwards. Brent oil futures edged down 0.57% to $75.17 and WTI futures inched down 0.43% to $74.23.

Here are some events to watch this week:
• Bank of America, BlackRock, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley are among firms starting the U.S. earnings season
• A closely-watched inflation metric — the June U.S. consumer price index — will offer insight into the inflationary pressures Tuesday
• China second-quarter GDP, key economic indicators Thursday
• Federal Reserve Chair Jerome Powell appears before the Senate Banking Committee to deliver the semi-annual Monetary Policy Report to Congress Thursday
• Bank of Japan interest rate decision Friday

On the local front: dip-buyers were back on Friday. The All-share gained 1.75% to 66,385 points, while the Top-40 added 1.89%. Resources and banks gained 3.58% and 2.25%, respectively. Sasol rose the most in six weeks on Friday, adding 5.52% to R222.50.vCommodity prices boosted major diversified miners. BHP rose 4.88% to R446.02, while Anglo posted its biggest rise too; closing 4.93% higher at R588. Naspers shareholders overwhelmingly approved the company’s plans for a share swap with Prosus to address the much-criticised gap between its market value and the sum of its assets. Rand on the backfoot 0.67% to 14.3155/$, Yield on 10-year govt rand bonds fell 2.10 bps to 9.25 %. Top-40 futures down 112 points.

The Constitutional Court is scheduled to hear former president Jacob Zuma’s application for a review of his conviction and sentencing for contempt of court.
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European stocks are expected to open in mixed territory on Monday as global markets head in different directions. Britain’s FTSE is seen opening 19 points lower at 7,096; Germany’s DAX 13 points lower at 15,675; according to IG markets. The mixed open expected in Europe doesn’t reflect the positive trade in Asia-Pacific markets overnight. On Friday European stocks recouped most of the previous session’s losses as positive news on Pfizer’s booster shot offset worries over the rising number of global Covid-19 cases. The pan-European Stoxx 600 index was up 1.34%, France’s CAC-40 outperformed at 2.07% stronger, while the FTSE100 notched up 1.30%.

The S&P 500 Index closed at a fresh record after investors regained some confidence in the global growth outlook on Friday. The benchmark gauge rose 1.13% on Friday, the Dow gaining 1.30%, alongside the Nasdaq closing the session 0.98% firmer.
Amazon stock was in the red ahead of the announcement of a new executive order from Joe Biden aimed at the competitive practices of some of the tech sector’s biggest players. U.S stock futures are little changed.

On Friday, the People’s Bank of China said it will cut the amount of cash that banks must hold as reserves, releasing around 1 trillion yuan ($154.19 billion) in long-term liquidity to underpin a post-COVID economic recovery that is starting to lose momentum. The cut in the reserve requirement ratio (RRR) was announced on the same day that PBOC released data showing China’s broad credit growth in June surged past expectations. The Hong Kong market also rose, amid a relief rally in Asian shares following record highs on Wall Street. The bluechip CSI300 index rose 1.22%, while the Shanghai Composite Index gained 0.96%. Hong Kong’s benchmark Hang Seng index added 0.55%. Japan’s Nikkei225 surged 2.25%