Hong Kong stocks are set to rise Wednesday in an otherwise muted session for Asian equities following news of a reorganization for Alibaba that might act as a blueprint for China’s largest tech companies. US stocks and Treasuries fell.
(Bloomberg) — Hong Kong stocks are set to rise Wednesday in an otherwise muted session for Asian equities following news of a reorganization for Alibaba that might act as a blueprint for China’s largest tech companies. US stocks and Treasuries fell.
Futures contracts for the Hang Seng Index rose 1.8% while those for Japan and Australia fell after a downbeat session for the S&P 500 and tech-heavy Nasdaq 100 on Tuesday. US futures inched higher in early Wednesday trading.
US-listed shares of Alibaba Group Holding Ltd. jumped 14.3% on news of an overhaul that will see China’s online commerce leader split into six business units, a major restructuring that promises to yield several initial public offerings. The Golden Dragon index of Chinese companies that trade in the US rose 3.5%, its best day in almost two months.
The advance reflected a further shift in investor attitudes to Chinese technology companies after a crackdown from Beijing on large players such as Tencent and Baidu, which also rallied in US trading.
Read: Six Baby Babas Beats One Big Alibaba: Tim Culpan
Australian and New Zealand bond yields rose after Tuesday selling in Treasuries pushed yields higher across the curve. The two-year yield rose eight basis points and the 10-year benchmark climbed four basis points. An index of the dollar notched its lowest close in eight weeks.
The moves come as investors prepare for a raft of data on the American economy this week, including the central bank’s preferred measure of inflation — the so-called core PCE deflator — which is likely to factor into the Federal Reserve’s next rate decision.
St. Louis Fed President James Bullard said “appropriate monetary policy can continue to put downward pressure on inflation” despite the turmoil in banking. Meanwhile, US consumers appear to have shrugged off the bank failures, with the latest consumer confidence figures unexpectedly higher in March.
Swaps traders have priced in more than a 50% probability the Fed will lift rates by a quarter point at its next meeting, with plans to ease then sharply thereafter. However, several strategists have joined BlackRock Investment Institute in saying markets are wrong in expecting imminent rate cuts.
“Recent events in the US and European banking sectors have not altered our macroeconomic views,” wrote Joe Davis, chief global economist at Vanguard Group Inc., in a note. “The Federal Reserve still has work to do to bring down inflation — a task that was always going to be a challenge, likely to entail higher unemployment and tighten credit and financial conditions.”
Investors were also focused on European banks after French prosecutors said lenders including Societe Generale SA and BNP Paribas SA face collective fines of more than 1 billion euros ($1.1 billion) as part of a probe into tax fraud and money laundering. An index of European banks rose Tuesday despite the news.
Elsewhere, oil was higher after a clash between Iraq and its Kurdish region curtailed exports. Gold gained and Bitcoin traded around $27,400.
Key events this week:
- EIA Crude Oil Inventory Report, Wednesday
- Eurozone economic confidence, consumer confidence, Thursday
- US GDP, initial jobless claims, Thursday
- Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin speaks at event. Treasury Secretary Janet Yellen also speaks, Thursday
- China PMI, Friday
- Eurozone CPI, unemployment, Friday
- US consumer income, PCE deflator, University of Michigan consumer sentiment, Friday
- ECB President Christine Lagarde speaks, Friday
- New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 7:04 a.m. Tokyo time. The S&P 500 fell 0.2%
- Nasdaq 100 futures rose 0.1%. The Nasdaq 100 fell 0.5%
- Hang Seng futures rose 1.8%
- S&P/ASX 200 futures fell 0.4%
- Nikkei 225 futures fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.4%
- The euro was little changed at $1.0844
- The Japanese yen was little changed at 130.83 per dollar
- The offshore yuan was little changed at 6.8799 per dollar
Cryptocurrencies
- Bitcoin fell 0.5% to $27,186.5
- Ether fell 0.3% to $1,769.88
Bonds
- The yield on 10-year Treasuries advanced four basis points to 3.57% on Tuesday
- Australia’s 10-year yield advanced four basis points to 3.34%
Commodities
- West Texas Intermediate crude rose 0.7% to $73.70 a barrel
- Spot gold was unchanged at $1,973.54 an ounce
This story was produced with the assistance of Bloomberg Automation.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.