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Asian Stocks Gain With Yuan as Trade Woe Set Aside: Markets Wrap: Bloomberg

  • Pound in focus as Brexit secretary quits May’s government
  • Earnings season begins in U.S. this week after jobs strength

Asian stocks gained, building on a positive Friday session for global equities, as investors set aside concerns about escalating trade tensions to prepare for the latest earnings season after signs of continued economic strength.

China’s currency rose against the dollar one week after Chinese officials emphasized that they wouldn’t use the yuan as a trade-policy weapon. The dollar slipped to a three-week low, helping reduce pressure on emerging markets. Equity benchmarks in Japan, Hong Kong and Shanghai climbed, while Australian and Korean ones lagged behind. Ten-year Treasury yields ticked higher. The pound pared gains after the U.K. cabinet member in charge of Brexit discussions resigned from Prime Minister Theresa May’s government.

The start of earnings season this week may divert some attention away from the trade war that’s kept global stocks under pressure. Friday’s U.S. jobs report showed another month of gains in excess of 200,000, spurring more Americans to re-enter the workforce. Also Friday, German industrial production beat all estimates for May.

Those signs of strength contrast with trade tensions, with China retaliating against U.S. tariff increases and President Donald Trump threatening to impose levies on even more Chinese goods.

The pound pared early gains after news that David Davis quit as Brexit secretary, with at least two senior officials joining him in the move. Elsewhere, investors are assessing the impact of the flooding and landslides that killed at least 90 people in Japan, knocking out electricity and forcing many companies, including Amazon, Mazda and Panasonic, to halt some operations.

Terminal users can read more in Bloomberg’s Markets Live blog.

These are some events to look out for this week:

  • European Central Bank President Mario Draghi addresses the European Parliament on Monday and may shed light on the timing of a rate increase next year.
  • Chinese trade data due at the end of the week will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said. China releases June PPI and CPI on Tuesday, both of which should show a pickup.
  • The most noteworthy U.S. data is the June inflation report on Thursday, which consensus expects will show both headline and core price growth picking up. There’s another deluge of Treasury debt sales too, with a total $156 billion of notes and bills offered.
  • Earnings season gets going with JPMorgan Chase & Co. and Citigroup among the largest companies due to give results, as well as India’s Infosys Ltd.

Here are the main market moves:

Stocks

  • Japan’s Topix index advanced 1.2 percent as of 2:12 p.m. in Tokyo.
  • South Korea’s Kospi rose 0.8 percent.
  • Hang Seng and Shanghai Composite advanced at least 1.6 percent.
  • Australia’s S&P/ASX 200 Index was up 0.3 percent.
  • Futures on the S&P 500 gained 0.3 percent after the underlying gauge closed 0.8 percent higher on Friday.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2 percent, touching the lowest since mid-June.
  • The euro rose 0.2 percent to $1.1765.
  • The British pound was up 0.1 percent at $1.3302 after rising as much as 0.4 percent earlier.
  • The Japanese yen was flat at 110.43 per dollar.

Bonds

  • The yield on 10-year Treasuries added two basis points to 2.84 percent.
  • Australian 10-year government bond yields slid two basis points to 2.60 percent.

Commodities

  • West Texas Intermediate crude rose 0.4 percent to $74.10 a barrel.
  • Gold advanced 0.3 percent to $1,259.05 an ounce.

By July 9, 2018, 3:19 PM GMT+10

Source: Bloomberg

 

 

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