Asian equities edged up Friday after US stocks closed higher in a volatile session as investors await inflation data for clues on the Federal Reserve’s rate-hike campaign.
(Bloomberg) — Asian equities edged up Friday after US stocks closed higher in a volatile session as investors await inflation data for clues on the Federal Reserve’s rate-hike campaign.
Stock rose in Japan, South Korea and Australia, while futures contracts for Hong Kong signaled declines. The S&P 500 halted a four-day selloff Thursday, while the Nasdaq 100 outperformed.
Oil extended on Thursday’s advance, when it snapped its longest losing streak since December amid strength in commodity currencies and signs of appetite for risk taking.
Japanese markets will be under the spotlight during the Asian trading day, with data Friday showing accelerating inflation as the government’s nominee to be the next central bank governor faces his first grilling in parliament. Investors are looking for hints on how hawkish or dovish he will be at time when markets are testing the bank’s yield-curve control program.
The yen strengthened slightly while the dollar was little changed against most major currencies and Treasuries looked set to continue gains into a third day.
A key US economic data awaits investors later Friday in the form of personal consumption expenditures — the Fed’s preferred price gauge. It’s expected to show acceleration, adding to a string of unfavorable figures that bolster the case for the central bank to hold rates at 5.25% for some time, according to Bloomberg Economics’ Anna Wong. The current benchmark sits in a range between 4.5% and 4.75%.
“Whatever happens, the dollar is very much in focus today – it’s likely to remain bid should PCE and inflation expectations move higher,” according to Matthew Simpson, an analyst at City Index.
Investors are caught between welcoming the evidence that the US economy remains on a stable footing and fearing that this resilience will provoke a stern reaction from policymakers, according to Michael Shaoul at Marketfield Asset Management,
Billionaire quant investor Cliff Asness warned that US stocks are vulnerable to a macro shock if inflation doesn’t stage a spirited decline as the market expects. JPMorgan Chase & Co.’s chief Jamie Dimon told CNBC there’s still a chance for a soft landing for the US economy, though “out in front of us there’s some scary stuff.”
Elsewhere, Bitcoin was on pace for its second monthly advance, breaking with stocks and other riskier assets that have slid amid renewed concern about rising interest rates. The crypto market’s rally recovers only a sliver of the ground lost last year, when prices tumbled and the collapse of the FTX exchange caused a pullback by investors.
Key events this week:
- BOJ governor-nominee Kazuo Ueda appears before Japan’s lower house, Friday
- US PCE deflator, personal spending, new home sales, University of Michigan consumer sentiment, Friday
- Russia’s invasion of Ukraine hits the one-year mark, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 9:11 a.m. Tokyo time. The S&P 500 rose 0.5%
- Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 0.9%
- Japan’s Topix index rose 0.2%
- South Korea’s Kospi index rose 0.3%
- Australia’s S&P/ASX 200 Index rose 0.3%
- Hong Kong’s Hang Seng futures fell 1.3%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0600
- The Japanese yen rose 0.1% to 134.50 per dollar
- The offshore yuan was little changed at 6.9157 per dollar
Cryptocurrencies
- Bitcoin rose 0.5% to $23,998.88
- Ether rose 0.6% to $1,654.59
Bonds
- The yield on 10-year Treasuries was little changed at 3.87%
- Australia’s 10-year yield declined two basis points to 3.86%
Commodities
- West Texas Intermediate crude rose 0.4% to $75.70 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth.
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