(March 11): Stocks in Asia looked set to start mixed Monday following the worst week for global equities since mid-December. The yen climbed.
Futures indicated Japan could eke out small gains when trading begins, while markets in Hong Kong and Australia pointed to declines. Benchmark 10-year Treasury yields enter the week at 2.63 percent, close to the lowest level in two months. The S&P 500 Index dipped on Friday and the dollar weakened after a report showed American hiring was the weakest in more than a year while wage gains were the fastest of the expansion. The pound fell as Brexit talks wavered ahead of a key vote in parliament on Prime Minister Theresa May’s revised deal.
Investors are adopting a cautious stance after a strong start to the year for risk assets amid signs of struggling global growth. Citigroup Inc.’s global economic surprise index fell to its weakest since 2013 and the European Central Bank’s fresh injection of stimulus showed the extent of its concern on the regional slowdown. Next up will be a slew of data from China this week that could give fresh clues on the impact of its easing policy after weak credit data.
On the trade front, China and the U.S. are in general agreement on many crucial issues and have held meaningful discussions on foreign exchange, People’s Bank of China Governor Yi Gang said.
The pound was lower at the start of what could be a key week for the future of Britain within Europe. May’s so-called meaningful vote on Tuesday is intended to be held after the government had secured further concessions from the EU on the issue of the Irish backstop. Those talks have failed to make much progress.
Elsewhere, Hong Kong faces the likelihood of rising borrowing costs after the city’s de facto central bank intervened to defend its currency peg for the first time since August. The Hong Kong Monetary Authority bought HK$1.51 billion ($192 million) of local dollars during London and New York trading hours after the currency fell to the weak end of its trading band, it said in a statement Saturday.
Here are some key events coming up:
Chinese retail sales, investment, credit and industrial production data for January and February are all scheduled for release this week. The National People’s Congress is set to wrap up with a speech on Friday from Premier Li Keqiang. U.K. House of Commons votes Tuesday on May’s revised Brexit deal, 20 days before Britain is scheduled to leave the EU. U.S. President Donald Trump is expected to release his proposed fiscal 2020 budget on Monday. Its arrival is about a month later than usual due to the lengthy partial government shutdown. Bank of Japan Governor Haruhiko Kuroda will speak on Friday, after he and his board meet to decide on monetary policy. No change in stimulus settings is anticipated, though there’s likely to be a discussion of whether or not to downgrade assessments of industrial production, exports and overseas economies.
These are the latest moves in markets:
Futures on Japan’s Nikkei 225 rose 0.5 percent late Friday. Hang Seng Index futures dipped 0.4 percent. The S&P 500 Index fell 0.2 percent Friday.
The yen advanced 0.1 percent to 111.03 per dollar. The offshore yuan was flat at 6.7310 per dollar. The Bloomberg Dollar Spot Index decreased 0.3 percent, the first retreat in more than a week, on Friday. The euro held at $1.1233. The British pound fell 0.4 percent to $1.2969.
The yield on 10-year Treasuries fell one basis points to 2.63 percent.
West Texas Intermediate crude dropped 1 percent to $56.07 a barrel. Gold climbed 1 percent to $1,298.30 an ounce. The Bloomberg Commodity Index fell 0.1 percent. - Bloomberg