Stocks Rise as Tech Shares Gain; Dollar Recovers: Markets Wrap: Bloomberg

Asian equities’ best start to a year since 2006 continued Tuesday as most bourses in the region pushed higher. The dollar rebounded from its recent slide and Treasuries inched higher as the U.S. bond market reopened after a holiday.

The MSCI Asia Pacific index climbed as advances in the technology and telecoms sectors offset a drop in energy and materials. Japanese shares closed at multi-decade highs, while stocks in Hong Kong headed for a record. The yen halted a five-day advance amid a warning from Japan’s finance minister about excessively rapid moves in the currency market. The euro declined after four sessions of gains and German bund yields inched lower.

Focus remained on China’s yuan, trading at the strongest level in more than two years and prompting speculation about possible steps to cool its gains.

Notwithstanding Tuesday’s gain, weakness for the greenback has extended into a sixth week despite a backdrop of solid U.S. economic growth. Traders appear to be more excited by potentially hawkish policy shifts from central banks in Europe and Japan, the improving political outlook in the euro area, and the synchronized nature of global expansion that’s also propelling emerging-market economies and assets.

Elsewhere, Brent crude slid from the highest in three years in London even as OPEC members called for output curbs to continue. Industrial metals declined, led by nickel.

Terminal users can read more in our markets blog.

Here’s what to watch out for this week:

• Earnings season ramps up: Taiwan Semiconductor Manufacturing Co., ASML Holdings NV, Bank of America Corp. and Goldman Sachs Group Inc. are among some notable releases.
• Industrial production in the U.S. probably increased in December, a report may show Wednesday, completing a solid year for manufacturing.
• U.S. housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release.
• The Bank of Canada’s interest-rate decision comes Wednesday. Monetary policy announcements are also this week due in South Korea, South Africa and Turkey.
• China releases fourth quarter GDP, December industrial production and retail sales Thursday.

And these are the main moves in markets:

Stocks

• The MSCI Asia Pacific Index gained 0.4 percent as of 4:26 p.m. Tokyo time, the highest on record.
• Topix index climbed 0.5 percent to the highest in more than 26 years on the biggest increase in more than a week.
• Hong Kong’s Hang Seng Index surged 1.4 percent to the highest on record with the largest jump in two weeks.
• Australia’s S&P/ASX 200 Index sank 0.5 percent to the lowest in more than four weeks.
• Futures on the S&P 500 Index gained 0.3 percent to the highest on record.

Currencies

• The Bloomberg Dollar Spot Index increased 0.2 percent, the first advance in a week and the largest climb in more than a week.
• The Japanese yen decreased 0.2 percent to 110.77 per dollar, the first retreat in more than a week.
• The euro declined 0.2 percent to $1.2241, the first retreat in a week.

Bonds

• The yield on 10-year Treasuries fell one basis point to 2.54 percent.
• Japan’s 10-year yield gained one basis point to 0.082 percent.
• Germany’s 10-year yield decreased one basis point to 0.58 percent, the biggest tumble in almost two weeks.

Commodities

• West Texas Intermediate crude advanced 0.2 percent to $64.43 a barrel, hitting the highest in more than three years with its sixth consecutive advance.
• Gold declined 0.1 percent to $1,339.32 an ounce, the first retreat in a week.
• LME copper decreased 0.9 percent to $7,145.50 per metric ton, the largest dip in more than a week.

By Cormac Mullen and Adam Haigh

January 16, 2018, 6:47 PM GMT+11

— With assistance by Helen Sun

Source: Bloomberg