Markets Wrap: Asian stocks steady; oil in focus on OPEC+ spat

Markets Wrap: Asian stocks steady; oil in focus on OPEC+ spat

Asian stocks were steady early Monday after U.S. shares climbed further on speculation the Federal Reserve has scope to continue providing substantial stimulus support. Oil edged lower as OPEC+ failed to reach an agreement on output policy.

Japan Nikkei 225 slipped 0.5% in early trade while the Topix index shed 0.43%. South Korea’s Kospi edged 0.33% higher.

The S&P/ASX 200 in Australia was 0.32% higher.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.26% higher.

U.S. equity contracts were stable. U.S. stock and bond markets are closed for the July 4 Independence Day holiday. 

Treasuries gained and the dollar dipped after the jobs report was seen as supporting the Fed’s accommodative stance. The greenback clawed back some of the losses Monday. Investors are awaiting the Federal Open Market Committee minutes later this week for clues on the policy outlook.

Oil was around $75 a barrel amid an OPEC+ dispute that cast doubt on a deal that may temper prices. All the members except the United Arab Emirates agreed to an easing of cuts and their extension to the end of next year.

While the U.S. jobs report eased concerns about the Fed’s hawkish pivot last month, central banks around the world are beginning to pull back from the emergency stimulus they deployed to fight the pandemic-driven global recession. 

The Reserve Bank of Australia is expected to gently rein in some of its emergency stimulus despite ongoing curbs against a recent Covid-19 flare up.

Damon Harrison
Market Analyst, IPG Group