Stocks in Asia were mixed Tuesday after a rally in global equities stalled ahead of a busy week of bank earnings.
(Bloomberg) — Stocks in Asia were mixed Tuesday after a rally in global equities stalled ahead of a busy week of bank earnings.
Shares posted gains in Japan, ending a two-day losing streak. Equities fell in Australia, and Hong Kong stock futures pointed to declines. US stock markets were closed Monday while contracts for the S&P 500 fell. A gauge of global equities traded flat in a sign the rally that’s pushed it to the best start to a year since 1988 has paused.
Activist investor Ryan Cohen has taken a stake in Alibaba Group Holding Ltd. and is advocating that the Chinese e-commerce company increase repurchases of its own shares, a move that may impact investors’ sentiment during trading today.
The dollar declined while the yen steadied after rallying over the past week ahead of a Bank of Japan meeting Wednesday that has traders on guard for further sudden tweaks to easy policy settings. Japan’s 10-year yield fell after breaching the BOJ’s ceiling again on Monday.
“The real market surprise will be if the Bank of Japan leaves policy unchanged or abandons yield curve control completely,” Tony Sycamore, a market analyst at IG Australia, wrote in a note.
“USD/JPY has already fallen almost 25 big figures from its October 151.95 high, and although we continue to view the medium-term risks as being to the downside, we aren’t inclined to chase the move lower into support at 125 or gamble over tomorrow’s BOJ meeting,” Sycamore said.
Treasury yields climbed across tenors after trading resumed following Monday holiday, with the 10-year US yield rising above 3.5%.
Earnings reports from Goldman Sachs Group Inc. and Morgan Stanley due today will provide guidance about the health of the global economy. Financial companies dominate the docket of fourth-quarter results this week and include Charles Schwab Corp, PNC Financial Services Group and State Street Corp.
Several Federal Reserve officials will be speaking this week, providing more clues on their policy priorities. The World Economic Forum’s annual meeting kicks off in Davos, Switzerland, with speakers including European Central Bank President Christine Lagarde and the International Monetary Fund’s Kristalina Georgieva.
Bitcoin extended one of its best-ever rallies, and continued to trade above $21,000 in a sign of healthy risk appetite.
Key events this week:
- Earnings to include: Charles Schwab, Discover Financial, Goldman Sachs, Interactive Brokers, Investor AB, Morgan Stanley, Netflix, Procter & Gamble, Prologis, State Street
- China retail sales, industrial production, GDP, Tuesday
- US Empire State manufacturing survey, Tuesday
- Fed’s John Williams to speak, Tuesday
- Eurozone CPI, Wednesday
- US retail sales, PPI, industrial production, business inventories, MBA mortgage applications, cross-border investment, Wednesday
- Bank of Japan rate decision, Wednesday
- Federal Reserve releases Beige Book, Wednesday
- Fed speakers include Raphael Bostic, Lorie Logan and Patrick Harker, Wednesday
- US housing starts, initial jobless claims, Philadelphia Fed index, Thursday
- ECB account of its December policy meeting and President Christine Lagarde on a panel in Davos, Thursday
- Fed speakers include Susan Collins and John Williams, Thursday
- Japan CPI, Friday
- China loan prime rates, Friday
- US existing home sales, Friday
- IMF’s Kristalina Georgieva and ECB’s Lagarde speak in Davos, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 9:13 a.m. Tokyo time. The S&P 500 rose 0.4% on Friday
- Nasdaq 100 futures fell 0.1%
- Japan’s Topix index rose 0.6%
- South Korea’s Kospi index rose 0.1%
- Australia’s S&P/ASX 200 Index was little changed
- Hong Kong’s Hang Seng futures fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.0834
- The Japanese yen rose 0.1% to 128.43 per dollar
- The offshore yuan rose was little changed at 6.7409 per dollar
Cryptocurrencies
- Bitcoin rose 0.7% to $21,275.63
- Ether was little changed at $1,580.30
Bonds
- The yield on 10-year Treasuries advanced one basis point to 3.52%
- Japan’s 10-year yield declined two basis points to 0.505%
- Australia’s 10-year yield declined one basis point 3.58%
Commodities
- West Texas Intermediate crude fell 1.3% to $78.85 a barrel
- Spot gold fell 0.1% to $1,918.47 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Robert Brand, Srinivasan Sivabalan, Masaki Kondo and Saburo Funabiki.
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