Asian equities advanced after US stocks rallied on optimism over debt-ceiling talks, allowing investors to refocus on the path for interest rates and the health of the banking system.
(Bloomberg) — Asian equities advanced after US stocks rallied on optimism over debt-ceiling talks, allowing investors to refocus on the path for interest rates and the health of the banking system.
Japan’s Topix Index rose more than 1% in the opening minutes of trade to place the benchmark on track for a fresh 33-year high. Nomura Holdings Inc. gained even after the company said it would cut its profit forecast.
Shares in Australia and futures for Hong Kong also climbed. US futures were little changed in Asia after the S&P 500 and Nasdaq 100 closed near highs of the day, rallying more than 1%.
President Joe Biden expressed confidence there will be no US default, and House Speaker Kevin McCarthy said reaching an agreement this week is “doable.” JPMorgan Chase & Co. chief Jamie Dimon said the US government “probably” will not default on its debts after he and other bank leaders met in Washington to discuss the debt limit.
Australian and New Zealand bonds dropped following a decline in Treasuries. The US two-year yield rose seven basis points on Wednesday, while the 10-year yield climbed three basis points to 3.56%. The Bloomberg dollar index was little changed after rising 0.2% Wednesday.
The yen stayed in a narrow range after Japanese export data for April fell short of estimates.
Aussie Jobs
Australian employment data due later Thursday are expected to show fewer jobs were created in April than March, with the jobless rate remaining at 3.5%. The Philippine central bank is forecast to hold interest rates at 6.25%. New Zealand’s finance minister will deliver the country’s budget, with economists expecting a return to surplus in 2026, a year later than predicted in the December fiscal update.
US regional banks rallied after Western Alliance Bancorp reported growth in deposits boosted sentiment and eased worries about the health of the industry. All members of the KBW Regional Banking index advanced, pushing the benchmark 7.3% higher for its best day since January 2021.
In late trading, Cisco Systems Inc. dropped after the networking company reported its third-quarter results and gave an outlook.
Alibaba Group Holding Ltd. results are due later Thursday after Tencent Holdings Ltd. posted its fastest revenue growth in more than a year. Walmart Inc. will report on Thursday in the US.
European Central Bank Vice President Luis de Guindos said the ECB has completed most of its tightening but there is still “a way to go.”
Key events this week:
- US initial jobless claims, Conference Board leading index, existing home sales, Thursday
- Japan CPI, Friday
- ECB President Christine Lagarde participates in panel at Brazil central bank conference, Friday
- New York Fed’s John Williams speaks at monetary policy research conference in Washington; Fed Chair Jerome Powell and former chair Ben Bernanke to take part in panel discussion, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 9:14 a.m. Tokyo time. The S&P 500 rose 1.2%
- Nasdaq 100 futures were flat. The Nasdaq 100 rose 1.2%
- Hang Seng futures rose 1%
- Japan’s Topix rose 1.2%
- Australia’s S&P/ASX 200 rose 0.7%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0838
- The Japanese yen was little changed at 137.64 per dollar
- The offshore yuan was little changed at 7.0134 per dollar
Cryptocurrencies
- Bitcoin rose 0.1% to $27,372.34
- Ether fell 0.3% to $1,820.59
Bonds
- The yield on 10-year Treasuries was little changed at 3.56%
- Australia’s 10-year yield advanced six basis points to 3.48%
Commodities
- West Texas Intermediate crude fell 0.3% to $72.62 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
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