Hong Kong’s equity benchmark climbed to the highest since
August, and mainland China equities also rose. But shares in South Korea, Japan
and Australia fell. China’s 1 trillion yuan ($138 billion) special bond
issuance program will began Friday and eventually include 20-, 30- and 50-year
debt. European stock futures were little changed.
News of the China planned debt issuance boosted sentiment
after weak data from the country published over the weekend had led to initial
Asian stock losses. The specter of further US-China trade tensions also weighed
on equities with a report on how much President Biden is set to increase
tariffs on Chinese electric vehicles.
“You are looking at a slightly muddied growth outlook” for
China, Sonal Desai, chief investment officer at Franklin Templeton, said in an
interview on Bloomberg Television. Regardless of who gets elected in the US
presidential election in November, we are going to see an escalation of
US-China trade tensions, he said.
Bloomberg’s dollar index and the euro were both little
changed. Japanese bonds fell after the central bank offered to purchase a
smaller amount of government debt than at a previous auction. The 30-year yield
rose to its highest since 2011.
Potential major catalysts for markets this week include a
policy rate decision from China on Wednesday and a US April inflation print the
same day.
Investors will also continue to scrutinize comments from US
officials for signs of how long the Federal Reserve will keep interest rates at
elevated levels. Fed Bank of Dallas President Lorie Logan said last week it’s
still too early to think about lowering borrowing costs, while Governor
Michelle Bowman said she doesn’t expect it will be appropriate for the Fed to
cut rates in 2024.
The weak Chinese data weighed on oil Monday, with commodity
traders also looking ahead to an OPEC+ meeting on supply policy.
Iraqi Oil Minister Hayyan Abdul Ghani initially said at the
weekend that Baghdad had cut production enough and wouldn’t agree to more. But
later, he said that any decision was a matter for OPEC, and it would stick to
whatever the group decided. OPEC+ meets June 1.
Elsewhere this week, the euro area is set to report
inflation and growth figures while a swath of Federal Reserve officials are due
to speak including Chair Jerome Powell.
Some key events this week:
Australia business confidence, Monday
New Zealand food prices, inflation expectations, Monday
India trade, CPI, Monday
Euro-area finance ministers meet in Brussels, Monday
Australia 2024-25 budget, Tuesday
Japan PPI, Tuesday
Germany CPI, ZEW survey expectations, Tuesday
UK jobless claims, unemployment, Tuesday
US PPI, Tuesday
Fed Chair Jerome Powell and ECB Governing Council member
Klaas Knot speak, Tuesday
China rate decision, Wednesday
Eurozone industrial production, GDP, Wednesday
US CPI, retail sales, business inventories, empire
manufacturing, Wednesday
Australia unemployment, Thursday
Japan GDP, industrial production, Thursday
China property prices, retail sales, industrial production,
Friday
Eurozone CPI, Friday
Stocks
S&P 500 futures were little changed as of 6:36 a.m.
London time
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average were little
changed
The MSCI Asia Pacific Index was little changed
The MSCI Emerging Markets Index rose 0.2%
S&P 500 futures were little changed
Nikkei 225 futures (OSE) fell 0.3%
Japan’s Topix fell 0.2%
Australia’s S&P/ASX 200 fell 0.1%
Hong Kong’s Hang Seng rose 0.7%
The Shanghai Composite was little changed
Euro Stoxx 50 futures were little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0774
The Japanese yen was unchanged at 155.78 per dollar
The offshore yuan was little changed at 7.2409 per dollar
The British pound was little changed at $1.2531
Cryptocurrencies
Bitcoin fell 0.5% to $60,959.31
Ether fell 1.3% to $2,885.17
Bonds
The yield on 10-year Treasuries was little changed at 4.49%
Germany’s 10-year yield advanced two basis points to 2.52%
Britain’s 10-year yield advanced two basis points to 4.17%
Australia’s 10-year yield advanced two basis points to 4.34%
Commodities
Spot gold fell 0.3% to $2,352.52 an ounce
West Texas Intermediate crude fell 0.3% to $77.99 a barrel
Spot gold fell 0.3% to $2,352.52 an ounce
This story was produced with the assistance of Bloomberg
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