Asian Stocks Gather Momentum, Watch for Daily RMB Pricing: Market Review

(Bloomberg) - Asian stocks are set to follow Wall Street higher after employment data released Friday showed a strong U.S. economy. China reopens after a two-day holiday.

More reads from Bloomberg.

• Royal Bank of Canada fires premier financial officer Ahn Jae-mong after investigation into personal ties.

• Trumpism is hollowing out the church

• Saudi Arabia scales back $1.5 trillion desert project Neom's ambitions

• Turkey joins NATO allies in suspending European arms treaty

• Kroner -紥尅伯格's wealth surpasses Elon Masker's for first time since 2020

Stock futures rose in Australia, Japan and Hong Kong. U.S. carriers were higher in early Asian trading after the S&P 500 and Nasdaq Resonance 100 both rose more than 1% on Friday.

Treasury yields surged as traders revised back their expectations for a sharp Fed rate cut this year following the release of strong U.S. payroll data. The strength of the labor market, which drives the economy, was underscored by a lower unemployment rate of 3.81 TP3T, steady wage growth, and a rise in the labor force participation rate.

Marc Chandler, Premier Market Strategist at Bannockburn Global Forex, said there are "fewer and fewer reasons to dismiss the jobs data," which lends support to the re-acceleration hypothesis and an extension of the American Exceptionalism." The economy is still growing faster than what the Fed considers a long-term non-inflationary pace.

In Asia, as markets reopen from the holiday break, traders will be watching China's daily Renminbi (RMB) exchange rate more closely than usual. Investors will be looking for signs of an official retaliation after last week's softening of the Renminbi's曏 barrens. The fixing could signal whether the Chinese government will support the yuan more strongly or allow it to depreciate moderately.

Richard Franulovich, Westpac Banking Corp's head of foreign exchange strategy, said China "found the depreciation and selling pressure under the surface flour much greater than they expected."" Richard Franulovich, Westpac's director of foreign exchange strategy, said, "This is what happens periodically with Koon's currency.

Focus will soon turn the曏 mid-week release of U.S. inflation data for March. With the arrival of the first quarter of the corporate earnings season, including JP Morgan Chase and Citigroup, including a number of banks will be announced on Friday, when the dollar price may remain above the Fed's target range.

Equity bulls are hedging their bets as the Fed's interest rate cuts wane, raising questions about how far the rally might go. Last week, the Cboe Volatility Index (VIX) hit its highest point since November, and the benchmark S&P 500 Index suffered its first weekly loss in three weeks.

Elsewhere, New Zealand's central bank is the first in the post-Covet tightening cycle to raise rates, and is expected to echo easing bets when it makes its decision this week. Meanwhile, the ECB is likely to leave its key interest rate unchanged as traders eye a rate cut in a few months. The minutes of the last meeting suggested a possible easing in June, and Council member Yannis Stournaras said last month that there could be four rate cuts this year.

"We may well have seen the beginning of a new era of monetary policy in which the ECB will play a leading role," said Erik F Nielsen, Simmons Economic Advisor at UniCredit Group." Based on existing economic data, that is to say, if it is purely 'data-dependent', the Fed may well end up cutting rates only once this year, whereas if it is purely 'forward-looking', the ECB may well be justified in cutting rates four (or even five) times this year.

On the commodity side, oil declined after six consecutive sessions of gains. Gold has also fallen after surging to record prices last week.

Important events this week

• Filipino interest rate resolution, Monday

• On Monday, Israel's interest rate resolution

• On Monday, German industrial production

• On Monday, U.S. Treasury Secretary Yellen met with the Governor of the People's Bank of China, Pan Gongsheng.

• On Tuesday, the Australian Consumer Confidence Index

• On Tuesday, China's total financing volume, money supply, and new RMB loans were all in line with the trend.

• On Wednesday, the New Zealand Interest Rate Resolution

• Wednesday, Korean parliamentary election

• Wednesday: Brazil CPI

• Wednesday, U.S. FOMC Minutes, Wholesale Inventories, CPI

• On Wednesday, the Canadian interest rate resolution

• On Thursday, China's PPI, CPI

• On Thursday, the eurozone ECB interest rate resolution

• On Thursday, New York Fed matron John Williams and Boston Fed matron Susan Collins spoke.

• On Friday, Japan's industrial production

• On Friday, China Trade

• On Friday, Korea's unemployment rate, interest rate resolution

• On Friday, German CPI, French CPI, Spanish CPI

• Argentina CPI, Friday

• On Friday, Citi, JPMorgan Chase and Wells Fargo will release their industry reports.

Main Market Movements

stock (market)

• As of 8:07 a.m. Tokyo time, S&P 500 futures were up 0.1 percent.

• Hang Seng Index futures rose 0.3%.

• S&P/ASX 200 futures rose 0.5 percent.

Currency

• Bloomberg Dollar Spot Index little changed

• Euro exchange rate little changed at US$1.0832

• The yen was little changed at 151.67 yen per dollar.

• The offshore RMB exchange rate was little changed at USD7.2514 per US dollar.

• AUD little changed at $0.6574

Encryption Currency

• Bitcoin little changed at $69,252.16

• Ether rises 0.8% to $3427.1

debentures

• Australia's 10-year bond yield rose 8 basis points to 4.18 percent.

bulk commodities

• West Texas Kerosene Intermediate crude fell 1% to $86.08 per barrel

• Spot gold fell 0.8% to US$2,312 per ounce

This story was produced with the assistance of Bloomberg Automation.

Most Read by Bloomberg Businessweek

• Everyone is rich, but no one is happy. Professional Golf is back!

• How Hertz's bet on Tesla went 耑?

• How Brouillette Became a $2 Billion Dollar Hottest Hit with an Undiscovered Future

• Repairing Boeing's broken corporate culture starts with a new airplane.

• Elon Masse resonance X has a porn problem.

Copyright ©2024 Bloomberg Intelligence.