Global Markets: Asia shares hit 15-month high as traders wait for CPI

Amotiv

14/05/2024 03:06

By Tom Westbrook
       SINGAPORE, May 14 (Reuters) - Asian shares hovered
around 15-month highs on Tuesday and the dollar was firm ahead
of highly anticipated U.S. inflation data, while Japanese bonds
were squeezed as the central bank pulled back a little on its
bond buying programme.    
    MSCI's broadest index of Asia-Pacific shares outside Japan
 .MIAPJ0000PUS  climbed slightly and hit its highest since early
2023 in morning trade, as a strong rally in Hong Kong shares
extended into a fourth consecutive week.  .HK 
    Japan's Nikkei  .N225  was flat. Benchmark 10-year Japanese
government bond yields  JP10YTN=JBTC  rose one basis point to
0.95%, the highest yield since November, and five-year Japanese
yields  JY5YTN=JBTC  hit 0.555%, the highest since 2011.  JP/ 
    World stocks and the S&P 500  .SPX  were steady overnight,
poised just below record peaks. A survey released on Monday by 
the New York Fed showed Americans see inflation a year from now
at 3.3%, higher than they did a month earlier, and later on
Tuesday U.S. producer price figures will be closely watched.
    Alibaba  BABA.N   9988.HK  will most likely report results
later on Tuesday.
    The main focus this week is on Wednesday's actual U.S. CPI
figures, to see whether some upside surprises in the first
quarter were a blip or a worrying trend. Expectations are for
core CPI to slow from an annual 3.8% in March to 3.6% for April.
    "This would be good, but not enough to confirm Fed easing
plans in (the third quarter)," Bob Savage, head of markets
strategy and insights at BNY Mellon, said in a note to clients. 
  
    In the currency market, nerves and the inflation expectation
survey were enough to keep the dollar from falling. Dollar/yen
hit its highest since the start of the month, when traders
reckoned Japanese authorities were intervening to buy yen.
    The yen traded as soft as 156.4 to the dollar. The euro
 EUR=EBS  was steady at $1.0786 and the Australian and New
Zealand dollars kept to recent ranges, the Aussie  AUD=D3  at
$0.6606 and kiwi  NZD=D3  at $0.6015.
    
    HANG SENG SURGES
    In China, Hong Kong's Hang Seng index  .HSI  is up 30% from
January's lows and has surged nearly 20% in a month.
    News and data in recent days included a third straight
monthly rise in consumer prices, better than expected imports
data, record low credit growth and marketing of a trillion yuan
in long-data special treasury bonds.
    Investors see positive demand signals and signs that as
monetary policy is reaching its limits, and with borrowers shy,
authorities are planning to spend to support growth.
    "Walking through the recent policy announcements, including
the expansion of stock connect and encouraging leading
enterprises to list in Hong Kong, it is hard not to come to the
conclusion that top management in China intends to reinstate
Hong Kong's role as an IPO hub," said OCBC analysts.
    In New Zealand, inflation expectations have dropped, data
published on Monday showed, and construction supplier Fletcher
Building cut its outlook, citing a housing slowdown.
    Fletcher's Australia-listed shares  FBU.AX  hit a two-decade
low on Tuesday. Australia's government is expected to boast
another surplus in its annual budget due on Tuesday.
    Shares in bellwether Australian automotive equipment seller
GUD  GUD.AX  leapt 9% after it forecast meeting expectations.   
    In Japan, the central bank announced its first cut to bond
buying operations since December on Monday - a surprise hawkish
signal to investors that drove selling in the market.
    Two-year Japanese yields  JP2YTN=JBTC  were untraded early
on Tuesday but hit their highest since 2009. U.S. Treasuries
were steady in Asia trade to leave 10-year yields  US10YT=RR  at
4.49% and two-year yields  US2YT=RR  at 4.86%.  US/ 
    The so-called meme stocks, which swung wildly after finding
popularity in retail trading blogs and social media posts, leapt
to life overnight after user "Roaring Kitty", credited with
sparking the 2021 frenzy, returned to post on X.com.
    Videogame store operator GameStop  GME.N  rose 74%. Oil and
gold were broadly steady with Brent crude futures  LCOc1  at
$83.40 a barrel and spot gold  XAU=  at $2,339 an ounce.

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World FX rates YTD    http://tmsnrt.rs/2egbfVh
Global asset performance    http://tmsnrt.rs/2yaDPgn
Asian stock markets    https://tmsnrt.rs/2zpUAr4
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 (Editing by Gerry Doyle)
 ((tom.westbrook@tr.com; +65 6973 8284;))
 
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