Asian stocks will start the week higher; Decline in bonds: market envelope
(Bloomberg) – Asian stocks are set to start the week higher as investors assess corporate earnings against worries about inflation and the economic recovery.
Futures increased in Japan, Australia and Hong Kong. US contracts edged up as stocks rose on Friday, with the S&P 500 posting its best week since July as earnings boosted sentiment.
Bond yields in New Zealand and the Kiwi dollar rose after New Zealand inflation accelerated to the fastest pace in 10 years. Yields on three-year Australian bonds jumped more than 10 basis points. Treasury yields climbed on Friday. The dollar was mixed against its major peers.
China’s gross domestic product for the third quarter, due Monday, as well as monthly industry and investment data will be closely monitored to assess the severity of power shortages. Meanwhile, People’s Bank of China Governor Yi Gang has said authorities can contain the risks posed to the Chinese economy and financial system by the struggles of the China Evergrande group.
Energy prices continued to rise, with crude oil surging above $ 83 per barrel at the highest since 2014. Brent topped $ 85 per barrel, the highest since 2018. Bitcoin topped $ 60,000 so that the first U.S. Bitcoin futures ETF could debut on Monday.
“It is not only that the market assesses that growth could accelerate in the fourth quarter, but also that some of the supply bottleneck issues have started to peak,” said Charles-Henry Monchau, Chief Investment Officer of Bank SYZ, on Bloomberg Television. “That’s why you have this sense of risk in the market.”
Despite the risk-oriented tone, investors continue to worry about inflation amid energy shortages leading to further production cuts. At the same time, the economic recovery remains uneven as central bankers move closer to cutting stimulus measures. US consumer confidence unexpectedly fell in early October, but retail sales rose.
Bank of England Governor Andrew Bailey said the central bank “should act” to curb inflationary forces and warn that higher energy costs would mean price pressures will persist. Mohammed El-Erian, chief economic adviser to Allianz SE and Bloomberg columnist, said investors should prepare for increased market volatility if the Federal Reserve withdraws the stimulus measures implemented by the Covid-pandemic. 19.
Among US earnings, Goldman Sachs Group Inc., Charles Schwab Corp. and Alcoa Corp. reported positive results.
For more market analysis, read our MLIV blog.
Events to follow this week:
- Profits are piling up, especially at AT&T Inc., Barclays Plc, Johnson & Johnson, Netflix Inc. and Tesla Inc.
- China releases retail sales, industrial production and GDP data on Monday
- Bank of Indonesia rate decision and briefing, Tuesday
- China’s AFN Standing Committee begins a meeting on Tuesday that will continue until October 23. A review of anti-monopoly regulations is on the agenda
- Housing starts in the United States, Tuesday
- EIA Crude Oil Inventory Report, Wednesday
- China real estate prices, preferential loan rates, Wednesday
- U.S. Conference Board leading index, U.S. existing home sales, jobless claims, Thursday
- Fed Chairman Jerome Powell participates in policy roundtable on Friday
Some of the main movements in the markets:
- S&P 500 futures rose 0.1% at 7:17 a.m. in Tokyo. The S&P 500 rose 0.8%
- Futures on the Nasdaq 100 gained 0.1%. The Nasdaq 100 rose 0.6%
- Nikkei 225 futures added 0.3%
- S & P / ASX 200 Index Futures Gain 0.4%
- Hang Seng index futures soared 0.6% earlier
- The Japanese yen was at 114.33 per dollar, down 0.1%
- The offshore yuan was at 6.4337 per dollar
- Bloomberg Dollar Spot Index fell 0.1%
- The euro was at $ 1.1603
- The yield on 10-year treasury bills rose six basis points to 1.57%
- The 10-year Australian government bond yield jumped about nine basis points to 1.74%
- West Texas Intermediate crude rose 1.1% to $ 83.17 a barrel
- Gold was at $ 1,766.57 an ounce
Â© 2021 Bloomberg LP