Asian equity markets are set for gains following a rally in US stocks as economic data fueled expectations the Federal Reserve is nearing the end of its most aggressive rate-hike cycle in decades.
(Bloomberg) — Asian equity markets are set for gains following a rally in US stocks as economic data fueled expectations the Federal Reserve is nearing the end of its most aggressive rate-hike cycle in decades.
Futures for equity benchmarks in Australia, Japan and Hong Kong all signal markets will open higher. US futures dipped in early Asia trading after the S&P 500 rose the most this month and the tech-heavy Nasdaq had the best day since the middle of March.
Asian currencies were little changed, following gains that sent the Aussie and kiwi up more than 1% on Thursday. The dollar fell against all of its Group-of-10 peers for a second day, sending a gauge of the greenback’s strength to a more than two-month low.
Treasuries climbed early in New York trading, only to give up gains with yields ticking higher in the afternoon session amid improved risk sentiment. The policy-sensitive two-year yield, however, stayed within a narrow range around 3.97% as the market continued to lean toward a quarter-point Fed hike in May with the central bank then expected to pause over the summer.
US stocks rallied Thursday as jobs and factory-gate inflation data were weaker than economists forecast. Jobless claims for the week ended April 8 rose to 239,000, compared with a median estimate of 235,000, adding to evidence the labor market is starting to soften. Meanwhile, producer prices fell in March by the most since the start of the pandemic.
“Basically what the data are showing is two things,” said Que Nguyen, chief investment officer of equity strategies at Research Affiliates. “The first is that inflation is not surprising to the upside, and at the same time, the job market seems stable. And so what we’re getting today is sort of an optimistic outlook that we’re going to have an almost like a Goldilocks situation where inflation’s going to slow, but the economy is not crashing.”
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Elsewhere, Amazon.com Inc. gained the most in two months after announcing new technology aimed at cloud customers and a marketplace for AI tools.
Banks, including JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc., will kick off the earnings season on Friday, with executive commentary on the probability of a recession in focus.
Key events this week:
- US retail sales, business inventories, industrial production, University of Michigan consumer sentiment, Friday
- Major US banks JPMorgan Chase, Wells Fargo and Citigroup report earnings, Friday
Some of the main market moves:
Stocks
- S&P 500 futures were little changed as of 7:23 a.m. Tokyo time. The S&P 500 rose 1.3%
- Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 2%
- S&P/ASX 200 futures rose 0.2%
- Nikkei 225 futures rose 0.6%
- Hang Seng futures rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index fell 0.6%
- The euro was little changed at $1.1049
- The yen was little changed at 132.57 per dollar
Cryptocurrencies
- Bitcoin rose 0.3% to $30,373.27
- Ether rose 0.2% to $2,012.53
Bonds
- The yield on 10-year Treasuries advanced five basis points to 3.44%
Commodities
- West Texas Intermediate crude rose 0.2% to $82.35 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jennifer Bissell-Linsk.
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