Asian Stock Futures Point to Gains as Commodities in Bull Market – Bloomberg

Stocks across Asia were poised to gain after Federal Reserve Chair Janet Yellen reiterated her intention to raise interest rates only gradually once the U.S. economy improves. Japan's yen held declines, while commodities climbed into a bull market.

Futures in Japan, South Korea, Australia and Hong Kong all rose after the S&P 500 closed at the highest level since November. Asian raw-material producers may appreciate as the Bloomberg Commodity Index capped a 20 percent rally from its January low. The yen held at 107.58 per dollar after falling the most in a month Monday.

The Fed Chair reaffirmed an outlook for gradual tightening, saying the positives in the U.S. economy outweigh the negatives, without specifying any precise timing. The odds for an increase by July fell to 22 percent after rising past 50 percent last week. Central banks in Australia and India are due to announce monetary policy decisions Tuesday, while Taiwan and the Philippines release inflation data.

Yellen "still thinks that policy will need to tighten gradually over time, but she backed away from her previous guidance that a rate increase would likely be appropriate over coming months," said Jason Wong, a currency strategist at Bank of New Zealand in Wellington. "A June rate hike is effectively off the table and the market is thinking that, unless we get a strong bounce-back in employment, then July is not looking likely either."

Stocks

New Zealand's S&P/NZX 50 Index, the first equity market to open in the Asia-Pacific region, was little changed following a holiday. Futures on Australia's S&P/ASX 200 Index and South Korea's Kospi index both rose 0.3 percent in most recent trading, while contracts on Hong Kong's Hang Seng Index added 0.8 percent. Futures on the FTSE China A50 Index rose 0.4 percent.

Futures on the S&P 500 were little changed after the underlying gauge rose 0.5 percent on Monday to the highest since November. The MSCI Emerging Markets Index rose 0.9 percent Monday, while the Stoxx Europe 600 Index advanced 0.3 percent. The FTSE 100 Index surged, as the pound dropped.

Commodities

The four-year bear market that pushed raw materials to the lowest level in a quarter century came to end as supply constraints drive a recovery in everything from soybeans to zinc. The Bloomberg commodity gauge rose 1.1 percent Monday to push its rally from a January low past 20 percent to meet the definition of a bull market.

West Texas Intermediate declined 0.1 percent to $ 49.64 a barrel in early Tuesday trading after jumping 2.2 percent on Monday.

Currencies

The Bloomberg Dollar Spot Index swung between gains and losses after last week's 1.6 percent decline triggered by the jobs report. The yen traded little changed at 107.55 per dollar after a 1 percent drop on Monday. Japan's currency has still climbed 3 percent over the past five days.

Australia's dollar was at 73.69 U.S. cents after surging 2.6 percent last week for its strongest weekly gain in three months. Twenty-five of 26 economists surveyed by Bloomberg expect the Reserve Bank of Australia to hold its key interest rate at a record-low 1.75 percent, with one predicting a cut to 1.5 percent.

The pound advanced 0.1 percent to $ 1.4452, after sliding 0.5 percent Monday when two polls showed support among Britons for a vote to leave the European Union was gaining momentum. A referendum on the issue is scheduled for June 23.