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The dollar rose on Monday and Asian stocks were mixed as traders weighed the implications of rising US Treasury yields amid President-elect Joe Biden’s push for huge tax aid to combat the impact of the pandemic.
The dollar climbed for a third day against major peers and Treasury futures were flat. The Japanese stock market is closed for the holidays and cash treasury bills will not be traded until London opens. An Asian share gauge fluctuated as South Korea turned lower after an earlier rise of 3.6%. S&P 500 futures have fallen.
U.S. stocks hit a record high on Friday after Biden announced he would present proposals this week for billion dollars in tax assistance to tackle the economic toll of soaring virus cases. Oil reduced some of last week’s jump and gold fell further.
The stock rally came to a halt earlier in the week as investors assess valuations stretched and some signs that global equities may be too hot. T-bill stocks and yields have climbed on expectations of a global recovery driven by the revival and eventual control of the pandemic with the help of vaccines. Higher yields could support demand for the dollar.
“After being bullish for several months, we are definitely becoming more cautious about the stock market at these levels,” wrote Matt Maley, chief market strategist at Miller Tabak + Co., in a note. He added that “the dollar is so oversold, over-hated and over-shorted that everything has to come together for a while at some point soon.
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The Democratic Party under Biden is poised to control both houses of Congress once he takes the helm, but securing approval for ambitious spending – such as $ 2,000 stimulus checks – can still be a challenge in a Senate that will be split 50-50 with the Republicans. . Meanwhile, President Donald Trump is entering the final days of his presidency facing a possible impeachment resolution after being accused of inciting last week’s deadly riot on the U.S. Capitol.
Biden’s impending political tasks following his inauguration next week include handling the growing tension with Beijing. Chinese state media called for retaliation after the Trump administration says the United States will do so remove the self-imposed brakes on diplomatic interactions with Taiwan. China claims the island as its territory.
On the virus front, Japan said it has found a new strain of the coronavirus with similarities to variants in the UK and South Africa. The Asian nation said it was difficult to immediately determine how infectious the strain is or the effectiveness of current vaccines against it.
Elsewhere, Bitcoin fell from Friday’s high of around $ 42,000.
Here are some key upcoming events:
Here are some of the main movements in the markets:
Stocks
- S&P 500 futures slipped 0.7% at 1:50 p.m. in Tokyo. The S&P 500 Index rose 0.6% on Friday.
- The Australian S & P / ASX 200 index fell 0.8%.
- South Korea’s Kospi index fell 0.8%.
- The Shanghai Composite Index fell 0.2%.
- Hong Kong’s Hang Seng Index rose 0.9%.
Currencies
- The Bloomberg Dollar Spot Index rose 0.5%.
- The yen fell 0.2% to 104.19 per dollar.
- The euro slipped 0.4% to $ 1.2170.
- The pound lost 0.5% to $ 1.3499.
- The offshore yuan fell 0.4% to 6.4873 per dollar.
Obligations
- The yield on 10-year Treasury bills climbed four basis points to 1.12% on Friday.
Basic products
- West Texas Intermediate crude fell 0.9% to $ 51.78 a barrel.
- Gold fell 0.9% to $ 1,831.86 an ounce.
– With the help of Joanna Ossinger
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