Asian shares advance on busy data week: markets close

(Bloomberg) — Stocks in Asia rose for a second session as markets shifted their focus this week to key U.S. data prints for more insight into the health of the world’s largest economy.

Most read from Bloomberg

A gauge of shares in the region rose Monday, following Friday’s gain of 1.5%. Benchmarks in Australia and South Korea advanced, while shares of Taiwan Semiconductor Manufacturing Co. jumped. due to rising incomes the index in Taipei helped to go up. Shares in Hong Kong were little changed, while those in mainland China fluctuated. The Japanese markets were closed for a holiday.

A semblance of calm returned after markets were battered early last week by fears that the Federal Reserve would wait too long to cut interest rates. The Cboe Volatility Index – Wall Street’s fear gauge – has reached its highest point since the early days of the Covid-19 pandemic. The yen was weaker against the dollar on Monday.

“The skies are not yet completely clear, but there are several reasons that suggest relatively calmer seas lie ahead,” Nomura Holdings Inc. analysts said. in a note, citing a decline in recession fears in the US. lower chances of a very aggressive Bank of Japan as a reason for optimism.

Elsewhere in Asia, traders will focus on Chinese retail sales and industrial production data this week to gauge whether the country’s economy is finding traction.

China continues to struggle with speculators in the bond market, with state banks selling debt to boost interest rates. Yields on the country’s 10-year benchmark bonds rose to their biggest single-day rise since February at the close. The People’s Bank of China said in a monetary policy report published Friday that asset management products based on bonds are exposed to interest rate risk and could lead to losses.

New Zealand’s central bank will also decide on policy this week as the economy shows signs of entering its third recession in less than two years. Australian and New Zealand government bonds were little changed on Monday. Cash trading in government bonds was closed in Asia due to the Tokyo holiday.

The yen rose last week as traders cut their bearish bets after the BOJ’s rate hike, creating a negative feedback loop as investors dumped carry trades that bounced around the markets before little changed last week. According to a former board member, the central bank will not be able to raise interest rates again this year, given the market turmoil that followed the recent rate hike.

The story continues

The BOJ and Fed are the biggest variables driving trade, said Taosha Wang, portfolio manager at Fil Asia Holdings Pte Ltd. For the US, “I don’t think the market agrees with that – either a recession, which we think is excessive or a soft landing,” she told Bloomberg Television’s Yvonne Man and David Ingles on Monday.

A tumultuous week for global bond markets, which moved towards calm on Friday as concerns about the potential economic downturn in the US – which led to a rally in US government bonds and a brief market slump – subsided.

The US consumer price index is expected to have risen 0.2% on Wednesday from June, both for the nominal figure and for the so-called core gauge that excludes food and energy. However, these modest measures may not be enough to derail the Fed from a widely expected rate cut next month.

Over the weekend, Fed Governor Michelle Bowman said she still sees upside risks to inflation and continued strength in the labor market, signaling she may not be ready to support a rate cut when U.S. central bankers meet again in September . Money markets have fully priced in a September rate cut and an easing of about 100 basis points this year, according to swap data from Bloomberg.

In the commodities sector, oil rose on Monday, posting a 4.5% gain last week. Some of the largest oil refineries in the US have scaled back operations at their facilities this quarter, adding to concerns about the emergence of a global crude glut. Gold traded lower.

Some important events this week:

• India CPI, industrial production, Monday

• Consumer confidence in Australia, Tuesday

• Japanese PPI, Tuesday

• Unemployment South Africa, Tuesday

• UK unemployment claims, unemployment, Tuesday

• Home Depot earnings, Tuesday

• US PPI, Tuesday

• Atlanta Fed President Raphael Bostic speaks Tuesday

• Eurozone GDP, industrial production, Wednesday

• New Zealand interest rate decision, Wednesday

• Unemployment rate South Korea, Wednesday

• Poland CPI, Wednesday

• British CPI, Wednesday

• US CPI, Wednesday

• Australian unemployment, Thursday

• Japan’s GDP, industrial production, Thursday

• Philippines interest rate decision on Thursday

• House prices in China, retail sales, industrial production, Thursday

• Tariff decision Norway, Thursday

• British industrial production, GDP, Thursday

• US initial unemployment claims, retail sales, industrial production, Thursday

• St. Louis Fed President Alberto Musalem and Philadelphia Fed President Patrick Harker speak Thursday

• Alibaba Group, Walmart earnings, Thursday

• Hong Kong unemployment rate, GDP, Friday

• Taiwan’s GDP, Friday

• Start of the US housing market, consumer confidence from the University of Michigan, Friday

• Chicago Fed President Austan Goolsbee will speak on Friday

Some of the major moves in the markets:

Stocks

• Futures on the S&P 500 were little changed at 12:45 a.m. Tokyo time

• Nikkei 225 futures (OSE) rose 0.7%

• Australia’s S&P/ASX 200 rose 0.5%

• Hong Kong’s Hang Seng was little changed

• The Shanghai Composite had changed little

• Euro Stoxx 50 futures rose 0.6%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0915

• The Japanese yen fell 0.3% to 147.06 per dollar

• The offshore yuan fell 0.1% to 7.1832 per dollar

• The Australian dollar rose 0.1% to $0.6585

Cryptocurrencies

• Bitcoin was little changed at $58,527.48

• Ether fell 0.6% to $2,541.2

Bonds

Raw materials

• West Texas Intermediate crude rose 0.3% to $77.04 a barrel

• Gold fell 0.2% to $2,427.25 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Richard Henderson.

Most read from Bloomberg Businessweek

©2024 BloombergLP