(March 14): Asian stocks looked set to follow U.S. equities higher as data signaling resilience in the American economy gave some comfort amid recent signs of deteriorating global growth. The pound soared as the U.K. parliament vote opened the door to delaying Brexit.
Futures on equities in Japan, Hong Kong and Australia pointed higher. The S&P 500 Index climbed for a third day, wiping out last week’s losses and reaching a four-month high as it held above the key 2,800 level. Treasury yields edged up as U.S. orders for business equipment increased in January by the most in six months and a producer price index signaled modest pressure on inflation.
The U.S. data signaled a positive start to the year for the world’s biggest economy and little pressure on the Federal Reserve to raise interest rates. Next up comes a slew of China data including retail sales and industrial production that could provide clues on how the economy’s reacting to stimulus. The ongoing Brexit drama, a cut to the U.K.’s growth forecast and a warning from America’s top trade negotiator that tariffs may not be rolled back are adding to an uncertain picture for global growth. The Bank of Japan starts its two-day policy decision Thursday.
“We are not really seeing things that would indicate a terrible market out there,” Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., told Bloomberg TV. “Sentiment is much more neutral and people have missed this rally to some degree, and that suggests the pain trade is probably a little bit higher.”
Sterling touched the highest since June as U.K. lawmakers rejected the idea of tearing the country out of the European Union with no agreement and U.K. Prime Minister Theresa May was said to plan to ask for an extension to the March 29 Brexit deadline lasting about two months.
Elsewhere, oil was boosted by a decline in U.S. crude and fuel stockpiles, adding to evidence of a tightening market. Emerging-market stocks declined for the first time in three days.
Here are some of the key events coming up:
Chinese retail sales, fixed-asset investment and industrial production data are scheduled for release Thursday and the National People’s Congress is set to wrap up on Friday. Bank of Japan Governor Haruhiko Kuroda will speak on Friday, after he and his board conclude their discussions on monetary policy.
And these are the main moves in markets:
Futures on Japan’s Nikkei 225 rose 1.3 percent in Singapore. Hang Seng Index futures added 0.4 percent. Futures on Australia’s S&P/ASX 200 Index rose 0.3 percent. The S&P 500 Index gained 0.7 percent.
The yen was steady at 111.20 per dollar. The offshore yuan held at 6.7023 per dollar. The Bloomberg Dollar Spot Index dipped 0.4 percent on Wednesday. The euro bought $1.1327, little changed. The British pound was at $1.3306 after surging 2 percent.
The yield on 10-year Treasuries climbed two basis points to 2.62 percent.
West Texas Intermediate crude increased 2.6 percent to $58.34 a barrel. Gold was steady at $1,309.03 an ounce. The Bloomberg Commodity Index rose 0.8 percent. - Bloomberg