Asian shares fare well as earnings season begins

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The Chinese yuan rose to a four-month high of 6.9872/$ and the dollar sat near a one-month low against a basket of currencies

Singapore/New York — Asian equity markets ground higher as investors tried to look past gathering China-US tension and renewed coronavirus lockdowns to upcoming company earnings, hoping that global stimulus efforts will yield upbeat outlooks.

“The yuan has a perfect combination for a currency — relatively tight monetary policy; yield spreads moving in favour of the currency and equity prices also rising more than most,” said Deutsche Bank's chief international strategist, Alan Ruskin. Both have added about 15% in July so far, and the rally continued in spite of a more circumspect take in Chinese media, which carried a commentary reminding investors about the 2015 crash and suggesting a rational approach to risk-taking.

US stock futures eased 0.1%, following another session of gains on Wall Street overnight. The yield on benchmark US 10-year Treasuries remained under pressure at 0.6562% and gold sat above $1,800/oz.The US has posted its largest number of daily new infections since the outbreak began and global tensions are on the rise.

That has investors hoping to hear some good news about the outlook when US earnings season begins next week.

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