Most Asian Shares Rise As Japan Rally After Vote: Markets End

(Bloomberg) – Most Asian stocks rose on Monday after Japanese election results raised expectations for a fiscal stimulus and historic highs in US stocks encouraged some investor optimism. The yen weakened.

Bloomberg’s Most Read

Shares jumped nearly 2% in Japan, where Prime Minister Fumio Kishida’s Liberal Democratic Party defied forecasts by retaining an absolute majority. Shares have fluctuated in China amid data signaling economic weakness due to power shortages, soaring commodity prices and Covid restrictions. US and European futures rose after Friday’s record highs for the S&P 500 and Nasdaq 100.

The 10-year US Treasury bill fell slightly and the spread between the 5-year and 30-year yields narrowed. Short-term yields from Canada to Australia surged on bets that monetary authorities need to raise interest rates to curb inflation. Traders are awaiting central bank meetings in the US, UK and Australia this week. The Federal Reserve is expected to reduce its bond purchases.

A dollar gauge ticked. In Australia, sovereign debt spared an epic collapse on Friday. The rout was sparked by the central bank’s failure to defend a bond yield target, sparking speculation about an imminent policy change.

The turmoil in the fixed income market suggests that investors anticipate a slowdown in the recovery from the pandemic as price pressures are leading central banks to reduce their economic support. Supply chain disruptions and lack of energy are fueling increases in the cost of living. Global equities have so far ignored these risks and remain near all-time highs, supported by corporate earnings.

“Depending on where you look, you get very different stories about the outlook for global markets,” Kerry Craig, global markets strategist at JPMorgan Asset Management, told Bloomberg Television. “If you look at the stocks and the rally you see, you think everything is fine. If you look at the bond market and the development of yields, there is obviously a lot more concern about inflation and policy normalization. “

While Chinese purchasing managers’ indices pointed to weakness, other indicators pointed to manufacturing activity elsewhere in Asia strengthening last month.

Stress in the Chinese real estate sector also remains a major concern. At least four developers defaulted on the bonds last month. China Evergrande Group has twice avoided this fate by paying coupons late at the 11th hour. High yield Chinese dollar notes fell.

Meanwhile, crude oil has faltered as pressure mounts on OPEC + to increase production at its meeting on Thursday. The recent weakness in crude is a near-term pullback from an “otherwise intact bull market,” analysts at Goldman Sachs Group Inc. wrote in a note, reaffirming a Brent target of $ 90 per barrel late in the year. year.

Here are some events to watch this week:

  • Gains continue including Airbnb, BMW, BP, Honda Motor, KKR, Moderna, Peloton, Pfizer, Pinterest, Qualcomm, SoftBank, Toyota Motor, Uber

  • Reserve Bank of Australia policy decision, Tuesday

  • FOMC rate decision and Fed chairman press conference, US factory orders, US durable goods, Wednesday

  • OPEC + meeting on the exit, Thursday

  • Bank of England announces decisions on its interest rate and bond buying program on Thursday

  • US unemployment, non-farm payroll, Friday

For more market analysis, read our MLIV blog.

Actions

  • S&P 500 futures rose 0.2% at 2:17 p.m. in Tokyo. The S&P 500 rose 0.2%

  • Futures on the Nasdaq 100 climbed 0.3%. The Nasdaq 100 rose 0.5%

  • Japan’s Topix index jumped 1.9%

  • South Korean Kospi rose 0.5%

  • Australia’s S & P / ASX 200 added 0.6%

  • Hong Kong’s Hang Seng Index lost 1.1%

  • China’s Shanghai Composite Index rose 0.1%

  • Euro Stoxx 50 futures rose 0.6%

Currencies

  • Bloomberg Dollar Spot Index rose 0.1%

  • The euro was at $ 1.1559

  • The Japanese yen was at 114.27 per dollar, down 0.3%

  • The offshore yuan was at 6.4017 to the dollar

Obligations

Merchandise

  • West Texas Intermediate crude fell 0.4% to $ 83.25 a barrel

  • Gold was at $ 1,785.22 an ounce, up 0.1%

Bloomberg Businessweek Most Read

© 2021 Bloomberg LP

Comments are closed.