(Bloomberg) – Asian stocks struggled for direction as investors awaited developments in U.S. inflation trends for clues about the Federal Reserve’s interest rate path.
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Asia-Pacific stock indexes were little changed, with gains in South Korea offset by declines in Hong Kong and mainland China. Japanese stocks rose, supported by higher stock prices in commodity companies and a slightly weaker yen.
“The market is focused on U.S. producer price data released later today, which could confirm or refute this week’s elevated CPI report,” said Matt Simpson, senior market strategist at City Index. “That seems to be suppressing volatility,” he said. Today’s Asian session was higher than usual, due in part to a lack of economic data. ”
Chinese market sentiment remained fragile even as officials promised central government funding to encourage consumers and businesses to replace old equipment and goods. Copper mining stocks in Asia rose after copper mines rose to an 11-month high due to potential capacity cuts at Chinese smelters.
Meanwhile, U.S. stock contracts edged higher after lethargic trading in the U.S. on Wednesday, with the S&P 500 ending lower and the tech-heavy Nasdaq 100 down 0.8%.
U.S. economic data released later this week will provide further signs of the health of the U.S. economy and the effectiveness of monetary policy. The Fed’s interest rate decision is expected next week.
FX lethargy
U.S. Treasuries firmed up in Asia after Wednesday’s sell-off, with the 10-year Treasury yield rising 4 basis points, while the dollar index was little changed.
The yen fell for a third day ahead of Friday’s briefing on annual wage negotiations by Japan’s largest union umbrella organization, Rengo. The Bank of Japan is expected to decide whether to raise interest rates this month after authorities review the initial tally of spring wage negotiations.
Alvin Tan, head of Asian FX strategy at RBC Capital Markets in Singapore, said markets were becoming very comfortable with a soft-landing scenario fueled by near-synchronous global central bank monetary easing. “It’s safe to say that there isn’t really much going on in the currency industry at this point, except perhaps with the yen,” he said in a note. “Some kind of global market shock will be needed to break the torpor in the currency markets.”
ByteDance was in the spotlight after the U.S. House of Representatives passed a bill that would ban TikTok in the United States unless its Chinese owners sell the video-sharing app.
In commodities, crude oil posted its biggest rise in nearly five weeks as U.S. crude inventories fell and Ukraine attacked another Russian refinery. Gold remained stable.
Elsewhere, Nippon Steel fell on reports that President Joe Biden is expected to issue a statement soon expressing concerns about the company’s proposed takeover of United States Steel. US Steel fell as much as 15%, its biggest intraday loss since June 2020. .
This week’s main events:
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US PPI, Retail Sales, New Unemployment Insurance Claims, Business Inventories, Thursday
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Chinese real estate prices Friday
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Japan’s largest trade union federation announces results of annual wage negotiations on Friday ahead of Bank of Japan policy meeting
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Bank of England releases inflation survey on Friday
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US Industrial Production, University of Michigan Consumer Sentiment, Empire Manufacturing, Friday
The main movements in the market are:
stock
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S&P 500 futures were up 0.1% as of 2:41 p.m. Tokyo time.
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Nasdaq 100 futures rose 0.3%
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Japan’s TOPIX rose 0.3%
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Australia’s S&P/ASX 200 falls 0.2%
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Hong Kong’s Hang Seng fell 0.8%.
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Shanghai Composite: Almost no change
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0942.
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The Japanese yen remained almost unchanged at 147.89 yen to the dollar.
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The offshore yuan was almost unchanged at 7.1984 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6615.
cryptocurrency
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Bitcoin fell 0.1% to $73,065.1.
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Ether fell 0.8% to $3,961.98.
bond
merchandise
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West Texas Intermediate crude oil is little changed.
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Spot gold fell 0.2% to $2,170.63 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Richard Henderson.
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