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Stocks Climb as Japan Extends Jump; Treasuries Dip: Markets Wrap

(Bloomberg) — Asian stocks were bolstered Tuesday by a further rally in Japan, with traders also weighing the outlook for central bank stimulus support and the impact of the delta virus strain on economic reopening.

Japan’s Nikkei 225 hit 30,000 for the first time since April. Equities slipped in South Korea but were steady in Australia. S&P 500 and Nasdaq 100 futures advanced ahead of a resumption in U.S. markets after a holiday. Treasury yields climbed and dollar dipped.

Oil extended losses amid Saudi Arabia’s price cut for Asian buyers and demand threats from the outbreak of the delta virus variant. Bitcoin topped $52,000. El Salvador plans further purchases after buying 200 coins ahead of adopting the cryptocurrency as legal tender on Tuesday.

In China, traders will monitor trade data for guidance on the state of the economy. Australia is due to revisit the question of whether to delay a planned taper of bond purchases as lockdowns sap the nation’s recovery.

Global shares at a record, weathering concerns that the delta strain is slowing the recovery from the pandemic and exacerbating supply snarls that are fueling inflation. A weak U.S. jobs report has bolstered the view that the Federal Reserve will delay paring the stimulus that has helped markets.

“The delta — and possibly other — variant(s) remain a cause for concern as the disease is spreading rapidly through unvaccinated communities and the efficacy of the 2021 vintage of vaccines is being questioned,” Chris Iggo, chief investment officer for core investments at AXA Investment Managers, wrote in a note. “I don’t think the recovery and growth outlook is negated by this but there could be some ‘air-pockets’ in the data and in investor sentiment.”

Goldman Sachs Group Inc. economists revised down their forecast for U.S. expansion this year, in part as the delta variant crimps consumer spending. The Covid-19 death toll is jumping in the world’s largest economy, highlighting vaccination gaps.

Elsewhere, aluminum supplier Norsk Hydro ASA jumped to a 13-year high in Oslo. Aluminum hit the highest in over a decade as political unrest in Guinea fueled concerns over supply of the raw material needed to make the metal.

What to watch this week:

U.S. President Joe Biden will likely make his choice this week on whether to renominate Fed Chair Jerome Powell to a second termReserve Bank of Australia rate decision TuesdayChina trade data will provide clues on its economic recovery, TuesdayEl Salvador’s Bitcoin law takes effect, making the virtual currency legal tender, TuesdayDallas Fed President Robert Kaplan holds a virtual town hall discussion WednesdayECB President Christine Lagarde holds a press conference after the bank’s rate decision ThursdayChina PPI, CPI, new yuan loans, money supply, aggregate financing, Thursday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

S&P 500 futures added 0.1% as of 9:31 a.m. in Tokyo.Nasdaq 100 futures increased 0.3%Topix index rose 1.2%Australia’s S&P/ASX 200 Index was little changedKospi index slipped 0.4%Hang Seng Index futures gained 0.2%

Currencies

The Japanese yen was at 109.80 per dollarThe offshore yuan was at 6.4504 per dollarThe Bloomberg Dollar Spot Index was steadyThe euro traded at $1.1875

Bonds

Ten-year U.S. Treasury yields rose about one basis point to 1.34%Australia’s 10-year bond yield rose about two basis points to 1.28%

Commodities

West Texas Intermediate crude fell 0.5% to $68.93 a barrelSpot gold was at $1,824.65 an ounce

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