Stock Rally Continues in Asia; Dollar Edges Higher: Markets Wrap

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By Adam Haigh

Asian equities climbed Monday, building on this year’s strong start that’s pushed the regional benchmark index to a record high as investors bet an expansion in corporate earnings won’t falter any time soon. Treasury yields extended a recent rise.

Gains in Hong Kong and South Korea stocks led the charge, with markets in Australia and Japan also helping to extend the MSCI Asia Pacific Index’s rise this year to 8 percent, on course for its best month since March 2016. The S&P 500 Index surged on Friday to a fresh all-time high. The yen steadied after the Bank of Japan clarified comments from Governor Haruhiko Kuroda in Davos on Friday did not mean a change to its forecast. The dollar edged higher following seven weeks of losses.

Investor focus is back on earnings and economic data this week after markets were roiled last week by protectionist rhetoric and conflicting positions on the dollar from U.S. President Donald Trump and some of his top officials. The week will also include the final Federal Reserve meeting presided over by Chair Janet Yellen. The value of global equities has surpassed $60 trillion this year and government bond yields have rallied as investors assess the outlook for inflation alongside a gentle improvement in global economic growth.

 

Elsewhere, West Texas oil held gains after closing at the highest in more than three years on Friday. Sterling slipped as Prime Minister Theresa May remained under pressure from pro-Brexit lawmakers in her Conservative Party.

Terminal users can read more in our markets blog.

Here are some important things to watch out for this week:

  • Earnings season sees some technology giants report, including: Alibaba Group Holding Ltd., Apple Inc., Facebook Inc. and Amazon.com Inc.
  • Federal Reserve policy makers gather for Chair Janet Yellen’s final meeting on interest rates before her term ends.
  • Bank of England Governor Mark Carney will speak before the U.K. Parliament’s Economic Affairs Committee in London Tuesday.
  • Gauges of Chinese manufacturing and services industries are due Wednesday. 
  • GDP reports including India and Taiwan are due Wednesday.
  • U.S. employers probably added more jobs in January than a month earlier, while the jobless rate held at an almost 17-year low and the pace of wage growth picked up from a year ago, economists forecast the government report will show Friday.
  • Donald Trump delivers his first State of the Union address on Tuesday.

These are the main moves in markets:

Stocks

  • Hong Kong’s Hang Seng Index advanced 0.1 percent as of 11:10 a.m. The Hang Seng China Enterprises of mainland shares rose 0.8 percent, extending this year’s surge to 18 percent.
    Japan’s Topix index rose 0.5 percent. 
  • South Korea’s Kospi index gained 1.1 percent. 
  • Australia’s S&P/ASX 200 Index climbed 0.6 percent.
  • Futures on the S&P 500 Index were up 0.1 percent after the underlying gauge climbed 1.2 percent Friday.

Currencies

  • The yen slid 0.2 percent to 108.82 per dollar.
  • The Bloomberg Dollar Spot Index rose 0.1 percent. It declined 0.3 percent on Friday, touching the lowest in more than three years.
  • The euro was 0.2 percent lower at $1.2403, near the strongest in more than three years.
  • The pound lost 0.2 percent to $1.4126.

Bonds

  • The yield on 10-year Treasuries rose two basis points to 2.68 percent.
  • Australia’s 10-year yield was little changed at 2.85 percent.

Commodities

  • West Texas Intermediate crude gained 0.3 percent to $66.36 a barrel, the highest in more than two years.
  • Gold slipped 0.1 percent to $1,348.29 an ounce.

— With assistance by Lu Wang

 

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