Asian stocks and currencies fell as investors weighed the repercussions of slowing imports by China on its economic recovery.
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(Bloomberg) — Asian stocks and currencies fell as investors weighed the implications of slowing imports by China for its economic recovery.
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Benchmarks have fallen from Hong Kong to Australia, as Japan has defied deflation. While an 8.5% increase in China’s exports for April beat economists’ expectations, imports fell by a worse-than-expected 7.9%, raising questions about future demand. Weak yuan.
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Euro Stoxx 50 futures rose, but S&P 500 and Nasdaq 100 contracts fell in Asia. The tech-focused Nasdaq 100 rose 0.3% on Monday, as Advanced Micro Devices Inc and Nvidia Corp, which makes chips with artificial intelligence capabilities, along with Alphabet Inc.
“The main data point that’s moving the markets is the import numbers and the really big drop surprise,” said Galvin Shea, currency analyst at NatWest Markets. “Recently, markets have been looking at Chinese economic data through a somewhat bearish lens, and that again shows that the import demand component is very weak.”
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However, shares of Chinese banks and brokers rose amid speculation of more political support for the financial sector. A call from the country’s regulators for lower commissions for home sales and rents also boosted sentiment, sending developers higher.
Yen strengthened against all of his peers in the G10. Bank of Japan Governor Kazuo Ueda said earlier that the central bank will end its policy of yield curve control if it reaches its 2% rate target. The Bloomberg Dollar Index was little changed despite the reserve currency’s lead against most of its emerging market peers in Asia.
Treasury bonds rose after falling on Monday as investors weighed what it might take for the Federal Reserve to reverse course on interest rates. Bond trading desks are preparing for as much as $35 billion in corporate debt sales this week, while Apple Inc. is poised to sell $5.25 billion.
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Investors will be watching US President Joe Biden and congressional leaders ready to discuss the issue of the debt ceiling. Meanwhile, Wednesday’s consumer inflation data may provide more clues to the Fed’s path and set the tone for stocks.
debt deadlock
For now, the debt-ceiling impasse offers a short-term return opportunity, according to Asia Pacific strategists at Saxo Capital Markets, including Charu Chanana.
“Further concerns about tightening credit or delays in resolving the debt ceiling could continue to lift short-term Treasury yields, possibly in three months’ time, as investors hedge against a potential default,” they wrote in a note.
Meanwhile, swaps traders remain optimistic that the Fed is ready to pause in June as contracts suggest rate cuts will begin as early as the July meeting, with cuts of at least a quarter point by the end of the year.
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“With the market convinced to pause in the June meeting, the upside barrier seems to be high and this could limit moves in interest rate futures, which could affect the US dollar, NAS100 and gold,” Chris Weston, Head of Research at Pepperstone Group Ltd. On a note.
Elsewhere in the markets, oil fell as wildfires in Canada slashed supplies, offsetting concerns about weak global demand for the fuel. Gold rose and Bitcoin held below $28,000.
Main events this week:
- US President Joe Biden is set to meet congressional leaders on the debt limit, on Tuesday
- New York Federal Reserve Bank President John Williams speaks to the Economic Club of New York on Tuesday
- US Consumer Price Index, Wednesday
- China PPI, CPI, Thursday
- Bank of England interest rate decision, industrial production, gross domestic product, Thursday
- US Producer Price Index, Initial Jobless Claims, Thursday
- The Group of Seven finance ministers and central bank governors meet in Japan, Thursday
- Consumer confidence in the American University of Michigan, Friday
- Federal Reserve Governor Philip Jefferson and St. Louis Federal Reserve Chairman James Bullard participate in a panel discussion on monetary policy at Stanford University, on Friday.
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Some of the major movements in the markets:
Stores
- S&P 500 futures were unchanged as of 6:30 am London time. The S&P 500 was little changed on Monday
- Nasdaq 100 futures have changed little. The Nasdaq 100 rose 0.25%.
- Futures on the Euro Stoxx 50 rose 0.2%.
- Japan’s Topix rose 1.2%.
- Hong Kong’s Hang Seng fell 0.5%.
- China’s Shanghai Composite Index rose 0.5%.
- Australia’s S&P/ASX 200 fell 0.2%
currencies
- The Bloomberg Spot Dollar Index has not changed
- The euro fell 0.1 percent to $1.0992
- The Japanese yen rose 0.1% to 134.91 per dollar
- The external yuan was little changed at 6.9263 per dollar
- The Australian dollar was not changed much at $0.6785
- The British pound was little changed at $1.2616
Digital currencies
- Bitcoin changed little at $27,574.53
- Ether hasn’t changed much at $1,840.67
bonds
- The yield on the 10-year Treasury fell 1 basis point to 3.50%.
- The 10-year Japanese bond yield advanced 1.5 basis points, to 0.425%.
- The 10-year Australian bond yield advanced six basis points to 3.46%.
goods
- West Texas Intermediate crude fell 0.4 percent to $72.84 a barrel
- Spot gold rose 0.4 percent to $2,028.30 an ounce
This story was produced with help from Bloomberg Automation.
– With the help of Jason Scott.
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