Asian equities began June mixed as investors continue to assess the strength of global economic growth. Oil rebounded following a slump triggered by doubts that an OPEC deal extension will be enough to combat higher production.
Japanese shares climbed while Australian equities were little changed. Bank shares led mild declines on the S&P 500 Index after JPMorgan Chase & Co. and Bank of America Corp. said second-quarter trading revenue is on pace to drop at least 10 percent as tranquil markets sap demand. Brazil’s central bank cut its key lending rate by 100 basis points as a corruption scandal facing the country’s president threatens to stall his reform agenda. The pound slid marginally as the latest Times/YouGov poll showed the Conservatives leading Labour by just three points.
Global equities ended May just shy of a record high as earnings growth remains strong enough to support optimism in the global economy, offsetting concerns for the inflation outlook. Meanwhile in the bond market, four straight months of gains in 10-year Treasuries come as Dallas Fed boss Robert Kaplan said he’s concerned about recent declines in the core measure of inflation, though reiterated he expects two more rate increases this year. Euro-area core CPI slipped more than expected in May.
The daily fixing level of the Chinese currency will again by in focus Thursday after the yuan rose above a technical level that may herald more gains amid speculation the country’s central bank is supporting the currency. The onshore yuan strengthened past its average price of the past 200 days for the first time since August 2015 on Wednesday, while its offshore counterpart is currently about 1 percent above the gauge.
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Here are some of the key upcoming events:
- Caixin’s China PMI could show whether the unexpected resilience of its official counterpart reflects the entire economy. The measure, which covers smaller, export-oriented companies, is forecast to drop to 50.1 from 50.3.
- The U.S. jobs report Friday may bolster the case for a rate hike, with a gain of 180,000 positions expected.
Here are the main moves in markets:
- The yen slipped 0.1 percent to 110.89 per dollar as of 9:12 a.m. in Tokyo, after gaining in the month of May. The Bloomberg Dollar Spot Index was little changed, following a 1.5 percent decline for May for the biggest monthly drop since January.
- The pound fell 0.1 percent to $1.2876. Click here for an in-depth look at how election polling is sending jitters through the currency market.
- Futures on the S&P 500 added less than 0.1 percent. The underlying gauge fell 0.1 percent Wednesday, trimming its May gain to 1.2 percent. It closed Friday at a record.
- West Texas Intermediate crude oil advanced 1 percent to $48.80 a barrel, rebounding from a 2.7 percent drop in the previous session.
- Japan’s Topix index rose 0.7 percent. Australia’s S&P/ASX 200 Index was little changed, as was South Korea’s Kospi. New Zealand shares rose 0.2 percent.
- The yield on 10-year Treasuries rose one basis point to 2.21 percent, after falling a similar amount on Wednesday.