Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Asian stocks rallied slightly higher on Tuesday, with US stocks around record highs as investors watch the start of the corporate earnings season and the relatively smooth sale of government debt.
Shares rose in Hong Kong and Japan, and fluctuated in China. US equity contracts were stable after a slight slump in the S&P 500 Index after three consecutive weeks of gains. Tech stocks weakened, led by Intel Corp. as Nvidia Corp. focused on its microprocessors market.
Bond yields rose only slightly after the US Treasury auctions of 3- and 10-year bonds attracted decent demand. The government is offering 30-year bonds on Tuesday.
Positive outlook for US growth should help corporate earnings, although stocks look uncertain at these record highs given peaks in Covid-19 cases and troubled roll-out of vaccines in parts of the world. The potential for stronger increases in inflation and financing costs are also at the top of the agenda, with investors targeting US consumer price data and strong demand in the remaining treasury bond auction.
“The real test will be when inflation starts to rise,” Priya Misra, global head of pricing strategy at TD Securities told Bloomberg TV. “That’s when rates need to be recalculated – either for an earlier exit from the Fed, or a later exit, but a faster path.”
Elsewhere, President Joe Biden told companies competing for a severely limited global semiconductor offering he has bipartisan support for government funding to address a shortage that has shut down automakers worldwide. Finance Secretary Janet Yellen will declined to name China as a currency manipulator in its first half-yearly foreign exchange report, according to people familiar with the issue, allowing the US to bypass another clash with Beijing.
Oil stabilized just below $ 60 a barrel and the dollar tumbled higher. Bitcoin climbed back above $ 60,000 ahead of a listing by the largest US cryptocurrency exchange.
US Treasury Secretary Janet Yellen will refuse to name China as a currency manipulator, according to people familiar with the case. Saleha Mohsin reports on “Bloomberg
Daybreak: Australia. (Source: Bloomberg)
Some important events to watch this week:
- Banks and financial companies start reporting earnings for the first quarter, inclusive JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc.
- The US will release inflation data on Tuesday.
- The Washington Economic Club is hosting Fed Chairman Jerome Powell for one moderated Q&A on Wednesday.
- The US Federal Reserve will release Beige Book on Wednesday.
- Data on the US, including initial jobless claims, industrial production and retail sales, comes Thursday.
- The figures for economic growth, industrial production and retail sales in China are out on Friday.
These are some of the most important movements in the financial markets:
Shares
- S&P 500 futures were stable from 10:37 am in Tokyo. The index changed little on Monday.
- The Japanese Topix index rose 0.5%.
- The Shanghai Composite Index has changed little.
- The Hang Seng index rose 0.6%.
- The Kospi index in South Korea climbed 0.7%.
- The Australian S & P / ASX 200 index was up 0.2%.
Currencies
- The Bloomberg Dollar Spot Index increased slightly by 0.1%.
- The yen fell 0.2% to 109.57 per dollar.
- The euro fell 0.1% to $ 1,1900.
- The offshore yuan was 6.5497 per dollar.
Bonds
- The yield on 10-year government bonds rose slightly by a basis point to 1.67%.
- Australia’s 10-year return was two basis points higher at 1.80%.
Raw materials
- West Texas Intermediate Crude Oil was flat at $ 59.71 a barrel.
- Gold was down 0.1% at $ 1,731.07 an ounce.
– With the help of Vildana Hajric, Claire Ballentine and Katherine Greifeld