Asia Stocks to Edge Higher; Treasuries Climb

TheEdge Fri, Oct 04, 2019 06:05am - 4 years View Original


(Oct 4): Stocks in Asia looked set to end the week with a reprieve as a wave of poor economic data countered an increase in wagers that the Federal Reserve will cut rates later this month. Treasuries climbed.

Futures edged higher in Japan and Australia, with contracts little changed in Hong Kong. Earlier, the S&P 500 rose the most in a month after climbing back from a drop of more than 1% sparked by the weakest reading on the U.S. services sector in three years. Odds the Fed eases policy further at its next meeting spiked as the data came just after the worst factory numbers in a decade. The yield on 10-year Treasuries dropped for the sixth straight day and the dollar dipped.

This week’s slew of poor data confirmed the global economy is struggling for traction, and went some way to validating concerns the weakness may be seeping from the manufacturing sector into consumer sentiment, as the U.S.-China trade war continues. That’s also driving bets that the Fed will pump more stimulus into the economy this year. Focus now turns to the non-farm payrolls figure on Friday, when Federal Reserve Chairman Jerome Powell will also speak.

“The facts are that the U.S. consumer still looks terrific, we’re coming into a third quarter earnings season where we’re not seeing revisions downward or upward either, and that’s all pretty good news for the market,” Sherry Paul, senior portfolio manager at UBS Global Wealth Management, told Bloomberg TV. And then “we combine all that with the beating drum of the Fed, continuing their rate policy.”

Meantime, China remains shut for a week-long holiday.

Here are some events coming up during the remainder of this week:

    Friday brings September’s non-farm payrolls data. Consensus is for 146,000 jobs, but the whisper number is 125,000 after a disappointing ADP report.
    Federal Reserve Chairman Jerome Powell is set to speak Friday.
    The Reserve Bank of India sets policy on Friday.

Here are the main moves in markets:
Stocks

    The S&P 500 Index rose 0.8%.
    Futures on Japan’s Nikkei 225 gained 0.4%.
    Hang Seng futures earlier closed flat.
    Futures on Australia’s S&P/ASX 200 Index added 0.5%.

Currencies

    The yen was at 106.90 per dollar.
    The offshore yuan traded at 7.1284 per dollar.
    The Bloomberg Dollar Spot Index declined 0.2%.
    The euro bought $1.0968.

Bonds

    The yield on 10-year Treasuries dipped seven basis points to 1.53%.

Commodities

    West Texas Intermediate crude fell 0.6% to $52.31 a barrel.
    Gold was at $1,505.10 an ounce. - Bloomberg

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