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Asian Stocks Set to Gain; 10-Year Yield Eyes 3.1%: Markets Wrap

Andreea Papuc
 

Stocks in Asia look set to advance Thursday after solid American economic data buoyed U.S. shares and sent Treasury yields closer toward 3.1 percent. The dollar steadied and the euro dropped amid political uncertainty in the region.

Equity index futures in Japan, Australia and Hong Kong were all higher after the S&P 500 Index rose above its 100-day average and the Russell 2000 Index hit an all-time high. The 10-year yield extended recent gains as factory production and housing starts showed strength in the economy. The yen ticked higher in early Asian trading. Emerging-market equities rebounded after Tuesday’s plunge, but developing currencies turned lower.

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Signs that the world’s largest economy will continue to pick up steam comforted investors who have had to contend with surging U.S. bond yields, geopolitical tensions from Asia to the Middle East, and worries about global trade. Macy’s Inc. results bolstered the sense that U.S. consumers remain on strong footing, overcoming fresh uncertainty about the U.S.-North Korea summit and mixed signals from the Trump administration on the state of play in trade negotiations with China.

In Asia, Indonesian assets will be watched closely Thursday as the central bank will probably boost its benchmark seven-day reverse repo rate by 25 basis points to 4.5 percent after recent easing prompted the rupiah to weaken.

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Elsewhere, Europe’s common currency fell as Italy moved closer to a populist government and the German chancellor cautioned that the region’s central bank will eventually ease stimulus. The Turkish lira reversed a drop after the central bank said it was monitoring markets and would take necessary steps.

Terminal users can read more in our markets live blog.

These are some key events to watch this week:

  • Malaysian first-quarter GDP growth is expected to slow to 5.6 percent year-on-year, but remain comfortably above the 10-year average.
  • Australian jobs and Japanese machine orders data are due Thursday.
  • New Zealand’s budget is due Thursday.
  • Chinese Vice Premier Liu He is expected in Washington for more trade talks.
  • U.S. industrial production numbers are due this week.

These are the main moves in markets:

Stocks

  • Futures on the Nikkei 225 Stock Average rose 0.4 percent in Singapore.
  • S&P/ASX 200 Index futures gained 0.2 percent.
  • Hang Seng Index futures climbed 0.8 percent.
  • S&P 500 Index futures were little changed as of 7:05 a.m. in Tokyo. The S&P 500 rose 0.4 percent.
  • The MSCI Emerging Market Index gained 0.5 percent.

Currencies

  • The Bloomberg Dollar Spot Index fell less than 0.1 percent, after reaching the highest in 20 weeks.
  • The euro fell 0.3 percent to $1.1807.
  • The Japanese yen increased 0.1 percent to 110.31 per dollar.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 3.096 percent.
  • Italy’s 10-year yield climbed 13 basis points to 2.08 percent, the highest in three months on the largest increase in almost 11 months.

Commodities

  • West Texas Intermediate crude was little changed at $71.52 a barrel.
  • Gold was steady at $1,290.93 an ounce, near the weakest in 20 weeks.

More from Bloomberg.com

Read Asian Stocks Set to Gain; 10-Year Yield Eyes 3.1%: Markets Wrap on bloomberg.com