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(Bloomberg) — Asian stocks rose this week, led by Japanese stocks, as investors awaited policy decisions in Japan and the United States for near-term trading cues.
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The MSCI Asia-Pacific Index rose on the back of gains in Japan, where the tech-heavy Nikkei Stock Average rose the most in a month. Mainland stocks also rose after reports that growth in China’s factory output and fixed asset investment were stronger than expected. U.S. stock futures rose slightly after the S&P 500 fell 0.7% on Friday.
About 90% of BOJ watchers expect authorities to end negative interest rate policy on Tuesday. Speculation about the move is mounting after Japan’s largest trade union group announced its strongest pay deal in more than 30 years. The yen traded at 149 yen to the dollar.
“Japanese stocks are rising on the back of a weaker yen and expectations that the currency won’t appreciate even if the central bank raises interest rates,” said Charu Chanana, a strategist at Singapore-based Saxo Capital Markets. Stated. “Every move from the Bank of Japan seems to be priced in, and all eyes are on Nvidia and the Fed this week.”
In China, shares of Hyundai Amperex Technology Co. Ltd. surged more than 5% after the company reported better-than-expected full-year net profit. The stock price move also follows surprising economic numbers that provide evidence of further traction for the world’s second-largest economy.
However, the Commonwealth Bank of Australia said the yuan was torn between the People’s Bank of China and the upcoming Fed policy meeting, and the statistics were unlikely to break the yuan out of its recent tight range.
“A potentially hawkish FOMC meeting could put upward pressure on the dollar/offshore renminbi,” CBA strategists led by Joseph Capurso said in a note to clients this week. However, that is “likely to be limited by the People’s Bank of China’s continued support of the onshore renminbi with daily corrections.”
Wednesday’s Fed policy meeting could determine the direction of global stocks next quarter. Ahead of the blackout period, Chairman Jerome Powell suggested the central bank was close to feeling confident about cutting rates, while others debated how deep or shallow the cuts would be.
Meanwhile, bond traders appear to have painfully surrendered to the reality of long-term high levels. The policy-sensitive two-year bond yield rose 11 basis points to 4.73% this month, extending last month’s rise. Swap traders are pricing in a rate cut of about 71 basis points by the end of the year, down from 134 basis points at the beginning of the year, according to data compiled by Bloomberg.
Bank of America economists, including Michael Gapen, wrote in a note to clients that while the Fed may have less confidence in inflation than before, it remains confident in the disinflationary trend. ”, adding that the central bank is likely to maintain its median forecast of three rate cuts this year. “This may be a pipe dream on our part, but there are some inflation reports and there is plenty of time between now and June to change course if necessary.”
Read more: Traders look to consumer stocks for clues about where the Fed is headed
Meanwhile, some of Adani Group’s dollar-denominated bonds have been depreciated over the past six months following reports that U.S. prosecutors have widened their investigation into the port and power conglomerate, focusing on whether it may have been involved in bribery. recorded the highest rate of decline.
Elsewhere this week, the Reserve Bank of Australia is expected to extend its interest rate suspension, while Bank Indonesia and the Bank of England are also expected to make policy decisions. Eurozone inflation statistics and Reddit’s initial public offering are also scheduled.
In the commodity market, crude oil prices rose significantly in a week for the first time in a month, as China’s macroeconomic indicators were released above expectations and geopolitical risks increased due to Ukraine’s attack on a Russian oil refinery. It rose as a result. Gold fell slightly, with iron ore falling below $100 a tonne in Singapore, the lowest price since May last year.
This week’s main events:
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Eurozone CPI, Monday
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Australian interest rate decision Tuesday
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Japan interest rate decision, Tuesday
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Canadian inflation Tuesday
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China loan prime rate Wednesday
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Indonesia interest rate decision Wednesday
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UK CPI, Wednesday
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US interest rate decisions Wednesday
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Brazil interest rate decision Wednesday
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ECB President Christine Lagarde speaks on Wednesday
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New Zealand GDP Thursday
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Taiwan rate decision, Thursday
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Swiss interest rate decision Thursday
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Norwegian interest rate decision Thursday
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UK interest rate decision Thursday
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Mexico interest rate decision Thursday
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European Union summit in Brussels on Thursday
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Japan CPI, Friday
The main movements in the market are:
stock
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As of 12:32 pm Tokyo time, S&P 500 futures were up 0.2%.
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Nikkei 225 futures (OSE) rose 2.6%
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Japan’s TOPIX rose 1.7%
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Australia’s S&P/ASX 200 falls 0.1%
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Hong Kong’s Hang Seng rose 0.2%
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The Shanghai Composite rose 0.5%.
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Euro Stoxx50 futures rose 0.1%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0890.
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The Japanese yen remained almost unchanged at 149.03 yen to the dollar.
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The offshore yuan was almost unchanged at 7.2036 yuan to the dollar.
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The Australian dollar rose 0.1% to $0.6568.
cryptocurrency
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Bitcoin fell 0.6% to $67,855.46.
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Ether fell 0.9% to $3,598.81.
bond
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The 10-year Treasury yield fell 1 basis point to 4.30%.
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Japan’s 10-year bond yield fell 2 basis points to 0.765%.
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The Australian 10-year bond yield fell one basis point to 4.12%.
merchandise
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West Texas Intermediate crude rose 0.4% to $81.38 per barrel.
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Spot gold fell 0.4% to $2,147.06 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Michael G. Wilson.
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