Asian stocks rose on Tuesday as tech stocks rallied and the outlook for strong corporate earnings helped offset concerns stemming from high inflation. The dollar went down.
MSCI Inc.’s Asia-Pacific Stock Index reached its highest level since late September. Hong Kong fared better and the city’s Chinese Tech Stocks indicator surpassed its 50-day moving average. US and European futures turned shortly after US stocks rose, with the Nasdaq 100 leading the way.
Treasury yields declined and a flattening of the yield curve was halted. In Australia, the yield on three-year bonds was lower after the minutes of the last central bank policy meeting stopped the first bets on rate hikes.
In China, the focus is on the debt-laden real estate unit of China Evergrande Group and its coupon payment due on a local bond.
Markets are comforting themselves with strong earnings, but they are also grappling with the prospect of tightening monetary policy to quell price pressures. Traders are waiting to see if a list of speakers from the Federal Reserve this week will try to defuse nervousness stemming from declining support for pandemic-era policies.
“The world is watching interest rates more closely than it has for some time, and rightly so, the moves have been emphatic, especially in short-term maturities,” wrote Chris Weston, head of research at Pepperstone. Financial Pty, in a note. . He added that it is “impressive how resilient and calm the markets are in the face of price changes.”
The oil rally came to a halt with prices hovering around multi-year highs. The natural gas shortage is driving demand for products such as fuel oil and diesel for power generation. Investors are paying close attention to the earnings season to see how higher energy and commodity costs are affecting margins.
“We’re going to get a lot of information on whether margins are being squeezed by this shortage and higher prices and wages continue to rise,” said JoAnne Feeney, partner at Advisors Capital Management and portfolio manager, at Bloomberg Television. He added that the delta-plus Covid variant could be among the sources of volatility in the coming months.
Elsewhere, Bitcoin is trading around $ 62,500. ETF issuer ProShares is preparing to launch its Bitcoin futures fund on the New York Stock Exchange on Tuesday.
Events to watch this week:
- Profits accrue, including those of AT&T Inc., Barclays Plc, Johnson & Johnson, Netflix Inc., and Tesla Inc.
- Bank of Indonesia interest rate decision and information, Tuesday.
- The NPC Standing Committee of China opens a meeting on Tuesday that will last until October 23. A review of antitrust regulations is on the agenda.
- Start of housing in the United States, Tuesday.
- EIA Crude Oil Inventory Report, Wednesday.
- Real estate prices in China, preferential interest rates for loans, Wednesday.
- US Conference Board Leading Index, US Existing Home Sales, Unemployment Claims, Thursday.
- Fed Chairman Jerome Powell participates in the policy discussion panel on Friday.
Some of the main movements in the markets:
- S&P 500 futures saw little change at 1:14 pm in Tokyo. The S&P 500 rose 0.3%
- Nasdaq 100 futures were little changed. The Nasdaq 100 rose 1%
- Japan’s Topix Index increased 0.4%
- Australia’s S & P / ASX 200 Index added 0.2%
- South Korea’s Kospi index rose 0.7%
- Hong Kong’s Hang Seng Index rose 1.2%
- China’s Shanghai Composite Index added 0.7%
- Euro Stoxx 50 futures rose 0.1%
- The Japanese yen was at 114.11 per dollar, up 0.2%.
- The offshore yuan was trading at 6.4075 to the dollar, up 0.3%.
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro was at $ 1.1651, 0.4% higher
- The 10-year Treasury yield fell two basis points to 1.58%.
- The yield on Australia’s 10-year bonds was 1.74%.
- West Texas Intermediate crude was at $ 82.53 a barrel, up 0.1%
- Gold was at $ 1,775.55, 0.6% higher
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