Equity markets in Asia fluctuated at the open ahead of a deluge of economic data due in China. U.S. stocks edged up overnight, the dollar was flat and benchmark Treasury yields held recent gains as investors awaited clues on monetary policy and tax reform.
Japanese stock benchmarks swung between gains and losses, halting a slump in Tokyo that began Thursday afternoon. Australia’s stocks fell, while futures in Hong Kong were little changed. Short-term U.S. Treasury yields climbed ahead of key U.S. economic data this week. The pound remained weak amid renewed political pressure on U.K. Prime Minister Theresa May. Bitcoin clawed back some losses after extending its slump from last week’s record high to as much as 29 percent.
As investors continue to monitor developments on U.S. tax reform discussions, attention turns Tuesday to data on China industrial production, fixed-asset investment and retail sales. Mario Draghi, Janet Yellen, Mark Carney and Haruhiko Kuroda speak at a European Central Bank conference on Tuesday. U.S. inflation and retail sales numbers that could influence Federal Reserve interest-rate hike odds are on the docket later in the week.
Kuroda said in a speech at the University of Zurich’s Swiss Institute of International Studies on Monday that the BOJ would continue to persist with “powerful monetary easing” to ensure that rising inflation expectations and price increases are not cut short. Kuroda has repeatedly said that the central bank needs to continue with its stimulus, even as other central banks begin taking steps to tighten policy.
Markets have stumbled in the past week after a global rally took U.S. stocks to records and Japan’s to the highest in a quarter century. In wake of the historic gains, the California Public Employees’ Retirement System, the largest U.S. pension fund, is considering more than doubling its bond allocation to reduce risk and volatility. Ten-year Treasury yields have climbed about 40 basis points from their low this year reached in September.
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Here are some key events investors are watching this week:
- This week’s data include GDP reports for Japan, Germany, Italy and the euro area, CPI in the U.S., U.K. and Spain, along with Aussie jobs and wages.
- BOE officials address the bank’s future on Thursday, while Draghi speaks a second time Friday. A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.
- Oil executives gather in Abu Dhabi to jostle for access to the Emirate’s oil riches.
These are the main moves in markets:
- The Topix index was little changed as of 9:26 a.m. in Tokyo, while the Nikkei 225 Stock Average rose 0.2 percent.
- Australia’s S&P/ASX 200 index was down 0.8 percent and the Kospi index in Seoul was little changed.
- Hang Seng Index futures fell 0.1 percent.
- Contracts on the S&P 500 Index were down less than 0.1 percent. The underlying measure rose 0.1 percent on Monday.
- The MSCI Asia Pacific Index fell 0.2 percent.
- The Bloomberg Dollar Spot Index was steady. It’s been trading in a tight range since touching the highest since July earlier this month.
- The Aussie dollar hit a four-month low of 76.10 U.S. cents in trading Tuesday, after losing 0.5 percent in the previous session.
- The yen was steady at 113.67 per dollar.
- The euro was little changed at $1.1670.
- The British pound was at $1.3121 after losing 0.6 percent.
- The yield on 10-year Treasuries was steady at 2.40 percent.
- Australia’s 10-year yield gained about two basis points to 2.64 percent.
- West Texas Intermediate crude was flat $56.71 a barrel.
- Gold advanced was at $1,277.57 an ounce, little changed from Monday.