Asian stocks have changed little on Friday ahead of a string of Chinese economic data, while world stocks have generally flew at record levels fueled by strong US economic data that could usher in a solid recovery.
MSCI’s widest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) had changed little, while Japan’s Nikkei (.N225) rose 0.2%.
China will release a range of economic data later in the day, including first quarter GDP.
MSCI’s widest measure of world equities (.MIWD00000PUS) was flat after a 0.89 percent increase the previous day to a record high.
“The US economic data released yesterday was all strong, confirming that the US economy is well underway,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
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The better economic outlook was underscored by other data, including the first claims for unemployment benefits which fell to their lowest level since March 2020 last week.
Despite strong data, US bond yields fell, partly driven by Japanese purchases, as they entered a new fiscal year this month.
The 10-year yield on US Treasuries fell to 1.529% on Thursday, a five-week low, and last stood at 1.566%, from the 14-month high of 1.776% set at the end of March.
“The market has already fully priced in a US economic recovery in the near term. And if the Federal Reserve holds interest rates for the next two to three years, it would undoubtedly be very attractive when compared to Japanese or Eurozone bonds. Said Chotaro Morita, chief fixed income strategist at SMBC Nikko Securities.
The decline in long-term returns has been beneficial for equities, and technical stocks in particular, given the idea that their historically expensive valuations can be justified because investors would have no choice but to buy stocks to make up for the low yields of bonds.
On Wall Street, the S&P 500 (.SPX) rose 1.11%, while the tech-heavy Nasdaq Composite (.IXIC) rose 1.31%, hitting its record high in February.
In the foreign exchange market, lower US yields held back the US dollar.
The euro was at $ 1.1965 after hitting a six-week high of $ 1.19935 overnight, while the US currency fell to a three-week low of 108.61 yen.
Oil prices held firm after hitting a four-week high on Thursday following positive US economic data and higher demand forecasts from the International Energy Agency (IEA) and OPEC.
Brent futures held steady at $ 66.93 a barrel, while US crude oil also changed little at $ 63.42 a barrel, both on track for their first substantial weekly gains in six.
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