Stocks in Asia were headed for a mixed open amid bets that Federal Reserve policy will remain tight to prevent a flare-up in inflation despite signs that price increases are easing.

Contracts for benchmarks in Hong Kong rose while those for Australian equities fell. The S&P 500 pared a gain of as much as 1.3% to close little changed on Thursday while Treasuries fell after Fed Bank of San Francisco President Mary Daly told Yahoo! Finance the central bank still has “more work to do” even after data showed the core consumer price index had the smallest back-to-back increase in more than two years.

“The case is building for the Fed to keep policy rates unchanged in September,” said Seema Shah, chief global strategist at Principal Asset Management. “While inflation is moving in the right direction, the still-elevated level suggests that the Fed is some distance from cutting rates.”

A renewed jump in longer-term US yields also weighed on sentiment after a weak 30-year bond auction. Treasury 30-year yields climbed after a $23 billion auction was awarded the highest rate since 2011. Two-year yields, which are more sensitive to imminent Fed moves, reversed an earlier slide.

Meanwhile, Country Garden Holdings Co. expects to report a multibillion-dollar loss for the first half of this year, as the Chinese developer provided more specifics to its recent forecast that helped fuel stock and bond declines.

In currencies, an index tracking the dollar is set to extend to a fourth weekly gain, the longest such streak since February. Meanwhile, the Australian dollar’s continued depreciation is starting to increase fears of inflation.

Traders will also be keeping a wary eye on the yen and the key 145 level versus the dollar amid a holiday in Tokyo that may contribute to volatility as volume thins. The persistently wide yield gap between Japan and the US is keeping the yen weak and within sight of levels that triggered intervention by the finance ministry last year.

In commodities, oil’s seven-week rally — driven by increasing signs of a tightening market — paused as technical barriers stalled further advances. European natural gas declined following its biggest jump in 17 months, as concerns about potential strikes at major export facilities in Australia weigh on trading.

Key events this week:

• UK industrial production, GDP, Friday
• US University of Michigan consumer sentiment, PPI, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 7:19 a.m. Tokyo time. The S&P 500 was little changed
• Nasdaq 100 futures rose 0.2%. The Nasdaq 100 rose 0.2%
• Hang Seng futures rose 0.2%
• S&P/ASX 200 futures fell 0.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro was little changed at $1.0982
• The Japanese yen was little changed at 144.79 per dollar
• The offshore yuan was little changed at 7.2411 per dollar
• The Australian dollar was little changed at $0.6519

Cryptocurrencies

• Bitcoin was unchanged at $29,421.05
• Ether was little changed at $1,849.53

Bonds

• The yield on 10-year Treasuries advanced 10 basis points to 4.11%

Commodities

• West Texas Intermediate crude was little changed
• Spot gold fell 0.1% to $1,912.48 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Brett Miller.