Shares in Asia are poised for a muted open Tuesday following listless trading on Wall Street, where stocks gave up most of their early gains to close little changed.
(Bloomberg) — Shares in Asia are poised for a muted open Tuesday following listless trading on Wall Street, where stocks gave up most of their early gains to close little changed.
Equity futures for Japan and Australia were slightly down while Hong Kong posted a modest gain, even as an index of US-traded shares of Chinese companies slid 1.7%. The S&P 500 ended Monday 0.1% higher after earlier rising almost 1%.
The lack of traction for equity markets shows many investors are concluding a recent rally was probably overdone, with recession risks lingering as central banks worldwide — including the Federal Reserve — indicate they’re unlikely to soon pivot away from strict monetary tightening.
Australian bonds were little changed in early trading Tuesday. The Reserve Bank of Australia is expected to lift its cash rate by another quarter-point to 3.60%, before peaking at 3.85% in April. The Aussie and kiwi were little changed Tuesday after underperforming major Group-of-10 peers.
Traders and investors in Asia are also looking to regain momentum lost on Monday in the wake of China’s disappointing National People’s Congress announcements at the weekend. Beijing set a modest economic growth target of around 5% for the year, with the nation’s top leaders avoiding any large new stimulus measures.
Later Tuesday, eyes will turn to Fed Chair Jerome Powell in Washington, where he will begin two days of testimony before the Senate and House committees. The central bank chief will have the chance of telegraphing how much more policy tightening he thinks is needed, ahead of a pivotal jobs report on Friday and the next US rates decision on March 22.
“Traders are still anticipating a 25 basis-point hike in a few weeks, and investors should prepare for volatility if the jobs read surprises in either direction — especially as some Fed officials have indicated a 50 basis-point hike remains on the table,” said Chris Larkin, managing director at E*Trade from Morgan Stanley.
Key events this week:
- US wholesale inventories, consumer credit, Tuesday
- Fed Powell’s semiannual Monetary Policy Report to the Senate Banking Committee, Tuesday
- Australia rate decision, Tuesday
- Euro area GDP, Wednesday
- US MBA mortgage applications, ADP employment change, trade balance, JOLTS job openings, Wednesday
- Fed Chair Powell’s semiannual Monetary Policy Report to the House Financial Services Committee, Wednesday
- Canada rate decision, Wednesday
- EIA crude oil inventories, Wednesday
- China CPI, PPI, Thursday
- US Challenger job cuts, initial jobless claims, household change in net worth, Thursday
- Bank of Japan policy rate decision, Friday
- US nonfarm payrolls, unemployment rate, monthly budget statement, Friday
Some of the main moves in markets as of 7:28 a.m. Tokyo time:
Stocks
- The S&P 500 was little changed
- The Nasdaq 100 was little changed
- Nikkei 225 futures fell 0.1%
- Australia’s S&P/ASX 200 Index futures fell 0.2%
- Hang Seng Index futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was unchanged at $1.0681
- The Japanese yen was little changed at 135.92 per dollar
- The offshore yuan was little changed at 6.9524 per dollar
- The Australian dollar was unchanged at $0.6730
Cryptocurrencies
- Bitcoin was little changed at $22,424.64
- Ether rose 0.1% to $1,568.6
Bonds
- The yield on 10-year Treasuries was little changed at 3.96%
- Australia’s 10-year yield was little changed at 3.77%
Commodities
- Spot gold was little changedThe Bloomberg Dollar Spot Index was little changed
This story was produced with the assistance of Bloomberg Automation.
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