(Bloomberg) — Shares in Asia rose for a second session as markets focused on key U.S. data prints this week for more insight into the health of the world’s largest economy.
Most Read from Bloomberg
Shares for the region rose on Monday, after a 1.5% increase on Friday. Benchmarks in Australia and South Korea advanced, while a jump in shares of Taiwan Semiconductor Manufacturing Co on rising revenue helped lift the index in Taipei. Hong Kong stocks were little changed while those in mainland China fluctuated. Japanese markets are closed for the holidays.
A semblance of calm returned after the markets were ravaged early last week by fears the Federal Reserve had waited too long to cut interest rates. The Cboe Volatility Index – a gauge of Wall Street’s fears – has returned to its highest level since the start of the Covid-19 pandemic. If it is weaker against the greenback on Monday.
“The sky is not clear yet, but there are several reasons that suggest that some calmer seas are ahead of us,” said analysts at Nomura Holdings Inc. in the note, expressed the fear of the US recession and the possibility of a lower rate of the Bank of Japan is very hawkish as one of the reasons for optimism.
Elsewhere in Asia, traders will focus on China’s retail sales and industrial production data this week to gauge whether the country’s economy is finding traction.
China is still battling bond market speculators, with state-owned banks selling debt to raise yield. Yields on the nation’s benchmark 10-year bond headed for the biggest one-day gain since February on a closing basis. The People’s Bank of China said in its monthly monetary policy report published on Friday that bond-based wealth management products are exposed to interest rate risk and could incur losses.
New Zealand’s central bank will also decide on policy this week, with the economy showing signs of entering its third recession in less than two years. Australian and New Zealand government bonds were little changed on Monday. Treasuries cash trading was closed in Asia due to a holiday in Tokyo.
If it rose last week as traders reduced their bearish bets after the BOJ rate hike, forcing a negative feedback loop as investors dumped trades that ricocheted on the market, before the end of last week little changed. The central bank will not be able to raise rates again this year, given the market turmoil that followed the recent hike, according to a former board member.
The BOJ and the Fed are the biggest variables driving trading, said Taosha Wang, portfolio manager at Fil Asia Holdings Pte Ltd. For the US, “I don’t think the market has agreed – either a recession, which we think is too big. , or a soft landing,” he told Bloomberg Television Yvonne Man and David Ingles on Friday.
A tumultuous week for global bond markets headed for calm on Friday as angst over a potential US economic downturn – which spurred a Treasury rally and a brief market meltdown – faded.
The US consumer price index on Wednesday is expected to rise 0.2% from June for the headline figure and the so-called core gauge that excludes food and energy. A modest move, however, may not be enough to dissuade the Fed from an anticipated interest rate cut next month.
Over the weekend, Fed Governor Michelle Bowman said she still sees risks to inflation and continued strength in the labor market, signaling she is not ready to back interest rate cuts when US central bankers meet in September. Money markets were fully priced in in September and eased by about 100 basis points for the year, according to swaps data compiled by Bloomberg.
In commodities, oil rose on Friday, surpassing last week’s 4.5% gain. Several top U.S. refiners cut operations at their facilities this quarter, raising concerns about a global glut of crude. Gold is trading lower.
Some important events this week:
-
India CPI, industrial production, Monday
-
Australian consumer confidence on Tuesday
-
Japan PPI, Tuesday
-
South African unemployment, Tuesday
-
UK jobless claims, unemployment, Tuesday
-
Home Depot earnings on Tuesday
-
US PPI, Tuesday
-
Atlanta Fed President Raphael Bostic said on Tuesday
-
Euro Zone GDP, industrial production, Wednesday
-
New Zealand tariff decision, Wednesday
-
South Korea’s unemployment rate on Wednesday
-
Polish CPI, Wednesday
-
UK CPI, Wednesday
-
US CPI, Wednesday
-
Australian Unemployment, Thursday
-
Japan’s GDP, industrial production, Thursday
-
Philippine tariff decision, Thursday
-
China home prices, retail sales, industrial production, Thursday
-
Norway’s tariff decision on Thursday
-
UK industrial production, GDP, Thursday
-
US initial jobless claims, retail sales, industrial production, Thursday
-
St. Louis Fed President Alberto Musalem, Philadelphia Fed President Patrick Harker said, Friday
-
Alibaba Group, Walmart earnings on Thursday
-
Hong Kong’s unemployment rate, GDP, is
-
Taiwan’s GDP, Friday
-
US housing since, University of Michigan consumer sentiment, there
-
Chicago Fed President Austan Goolsbee said, Friday
Some of the main movements in the market:
Savings
-
S&P 500 futures were unchanged as of 12:45 p.m. Tokyo time
-
Nikkei 225 futures (OSE) rose 0.7%
-
Australia’s S&P/ASX 200 rose 0.5%
-
Hong Kong’s Hang Seng has changed quite a bit
-
The Shanghai Composite was little changed
-
Euro Stoxx 50 futures rise 0.6%
currency
-
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
-
Little Bitcoin changed at $58,527.48
-
Ether fell 0.6% to $2,541.2
Bond
Commodity
-
West Texas Intermediate crude rose 0.3% to $77.04 a barrel
-
Spot 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 Bloomberg LP
