Asian stocks slide as gold slips and oil slumps By Reuters

By Wayne Cole

SYDNEY (Reuters) – Asian stocks faltered on Monday amid steep losses in gold and oil prices, while the dollar hit four-month highs against the euro after an optimistic report on the US jobs pushed bond yields up.

Sentiment was shaken by a sudden drop in gold as a breakout of $ 1,750 triggered stop loss sales to bring it down to $ 1,684 an ounce. It was down 1.4% for the last time at $ 1,738.

also fell 2% on fears that the spread of the Delta variant would dampen travel demand.

The holidays in Tokyo and Singapore created difficult trading conditions, leaving the MSCI’s largest Asia-Pacific stock index outside of Japan down 0.5%.

was closed but futures were trading 100 points below Friday’s close. Futures on the Nasdaq slipped 0.4% and 0.3%.

Chinese trade data released over the weekend beat expectations, while figures released on Monday showed inflation had slowed to 1% in July, offering no obstacle to further stimulus.

The Chinese blue chip index was a bit firmer.

The US Senate has come close to passing a $ 1 trillion infrastructure package, though it still has to go through the House.

Investors were still assessing whether Friday’s strong US payroll report would allow the Federal Reserve to take one more step toward withdrawing its stimulus measures.

“There isn’t much disagreement over a cut announcement between September and December followed by an actual cut between November and January,” said Rodrigo Catril, senior currency strategist at NAB.

However, the pace of the cut was still on hold and would decide when a real rate hike would take place, he said. The Fed currently buys $ 120 billion in assets per month, so a $ 20 billion cut would end the program in six months while a $ 10 billion cut approach would take a year.

The spread of the Delta variant could argue for a longer slowdown, with US cases returning to levels seen in last winter’s outbreak with more than 66,000 people hospitalized.

The July CPI figures due this week should also confirm that inflation has peaked, as used vehicle prices finally came down after huge gains.

Four Fed officials are speaking out this week and will no doubt offer their own take on tapering.

Meanwhile, stocks have been mostly supported by a strong earnings season in the US. BofA analysts noted that companies were following a 15% gain on second-quarter earnings, with 90% saying.

“However, companies whose earnings exceeded expectations experienced mixed reactions to their stock prices the day after the results were released, and the hiccups were penalized,” they wrote in a note.

“The forecast is stronger than average, but consensus estimates for two-year growth suggest a slowdown amid macroeconomic concerns.”

Financials strengthened on Friday as a steeper yield curve is seen to benefit bank earnings, while also penalizing the tech sector where valuations are very high.

US 10-year bond yields rose 1.30% on the jobs report, after hitting their lowest since February last week at 1.177%.

This jump gave the dollar a big boost and pulled the euro down to $ 1.1754, and briefly to its lowest since April at $ 1.1740. The dollar also climbed to 110.22 yen and moved away from last week’s low of 108.71.

This brought the US currency index to 92.882 and closer to the July high of 93.194.

Oil prices have fallen further after suffering their biggest weekly drop in four months, fearing coronavirus-related travel restrictions threaten upward demand expectations.

Brent fell $ 1.44 to $ 69.26 a barrel, while it lost $ 1.38 to $ 66.90.