Shares in Asia Advance With Jackson Hole in Focus: Markets Wrap

By Investor Empires On Aug 19, 2024

(Bloomberg) — Asian stocks rose Monday, as traders looked ahead to the Federal Reserve’s annual meeting in Jackson Hole for any clues about the future path of interest rates.

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A regional stock index rose, extending Friday’s gains. Chinese stock markets rose, led by technology shares. Japanese stocks were mixed and Australian shares fell. U.S. futures were higher in Asian trading after the S&P 500 gained 0.2% on Friday. The dollar was little changed, while Treasury yields rose.

Monday’s activity comes ahead of U.S. jobless claims and economic data, while Federal Reserve Chairman Jerome Powell is expected to offer fresh insights on the path of monetary policy when he speaks in Wyoming. The meeting caps a volatile period for global stocks, driven in part by concerns that the Fed won’t cut borrowing costs fast enough to prevent a deeper slowdown in the U.S.

“It’s almost impossible for him to avoid the topic of future rate cuts. We think he will give some hints,” Homin Lee, chief macro strategist at Lombard Odier & Cie. in Singapore, told Bloomberg TV.

Over the weekend, Goldman Sachs cut the odds of a U.S. recession next year to 20% from 25%, citing last week’s retail sales and jobless claims data. “If the August jobs report due on Sept. 6 looks reasonably good, we may cut the odds of a recession to 15%,” Goldman economists led by Jan Hatzius wrote in a note to clients on Saturday.

Signs that the U.S. recession is easing have sent emerging-market currencies higher. The Bloomberg Asia Dollar Index rose about 0.5% on Monday to its highest level since March, with the Thai baht and Malaysian ringgit leading gains in the region.

Elsewhere in Asia this week, investors will be looking to central bank meetings in Indonesia and South Korea for signs of monetary policy easing, while Thailand’s decision will be crucial after reports that the country’s new prime minister may abandon a major stimulus package.

Bank of Japan Governor Kazuo Ueda is set to attend a special session of Japan’s parliament this week to discuss a July 31 interest rate hike, which has rattled global markets. Meanwhile, hedge funds have turned bullish on the Japanese currency for the first time since 2021, a sharp turnaround from the deeply negative sentiment seen among such traders in early July.

In China, authorities are expected to keep key one- and five-year lending rates steady on Tuesday after the People’s Bank of China last week pledged more steps to support the economic recovery, while warning it would not adopt “radical” measures.

In commodities, oil prices fell for a fourth time in five sessions as traders tracked U.S.-led efforts to secure a 10-month-old ceasefire in the Middle East, while the war between Russia and Ukraine escalated. Gold hovered near an all-time high on hopes the Federal Reserve may be close to cutting interest rates. Elsewhere, iron ore had its worst week since early June on concerns that a steel industry crisis sweeping China will dent demand, while supplies from miners remained strong.

Here’s what’s coming:

The Democratic National Convention will be held on Monday, August 22.
Annual US-South Korea Joint Military Exercises Begin Monday
China’s key lending rates, Canada’s and eurozone’s CPI, Tuesday
Sweden, Turkey interest rate decisions Tuesday
Interest rate decisions in Indonesia and Thailand, Wednesday
Minutes of the Federal Open Market Committee’s July 30-31 Monetary Policy Meeting, Preliminary Review of the Bureau of Labor Statistics’ Annual Payrolls, Wednesday
European Central Bank Governing Council Member Fabio Panetta speaks in Rimini, Wednesday
South Korea’s central bank to hold interest rate decision Thursday
U.S. Vice President Kamala Harris delivers her acceptance speech on the final night of the Democratic National Convention, Thursday.
The Central Bank of Mexico and the National Bank of Poland issue monetary policy minutes
Malaysia releases CPI data, while Mexico and Norway release GDP data.
Japan’s CPI data is due out, and Bank of Japan Governor Kazuo Ueda is scheduled to attend a special session of the Japanese parliament to discuss raising interest rates on July 31, Friday.
Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey speak at the Federal Reserve’s annual Jackson Hole Symposium in Kansas City, Friday.

Some key movements in the markets:

Stocks

S&P 500 futures were up 0.2% as of 11:09 a.m. in Tokyo.
Nikkei 225 (OSE) futures fell 0.3%.
Japan’s Topix index fell 0.1%.
Australia’s S&P/ASX 200 was little changed.
Hong Kong’s Hang Seng Index rose 1.4%.
The Shanghai Composite Index rose 0.7%.
Euro Stoxx 50 futures rose 0.2%

Currencies

The Bloomberg Dollar Index fell 0.1%.
The euro was little changed at $1.1031.
The Japanese yen rose 0.1% to 147.47 yen per dollar.
The offshore yuan rose 0.2% to 7.1499 against the dollar.
The Australian dollar rose 0.2% to $0.6683.

Cryptocurrencies

Bitcoin fell 2% to $58,599.58
Ether fell 1.2% to $2,634.48.

Bonds

The yield on the 10-year US Treasury note was little changed at 3.89%.
The yield on the 10-year Japanese Treasury bond rose 2.5 basis points to 0.895%.
The yield on the 10-year Australian bond was little changed at 3.93%.

Goods

West Texas Intermediate crude was little changed.
Spot gold fell 0.3 percent to $2,499.69 an ounce.

This story was produced with the help of Bloomberg Automation.