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

Amotiv

14/05/2024 07:30

(Updates prices)
    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.
    U.S., British and European equity futures were broadly
steady, with the FTSE  .FTSE  and Europe's STOXX 600  .STOXX 
set to open near record levels.        
    MSCI's broadest index of Asia-Pacific shares outside Japan
 .MIAPJ0000PUS  hit its highest since early 2023 in morning
trade, before settling back to flat. Japan's Nikkei  .N225  was
edged higher.
    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.
    The gap, however, with U.S. yields remains hundreds of basis
points and wide enough to keep the frail yen under pressure.
    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.
    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.
    "If there was a fourth consecutive upside surprise, that
would probably influence the path of future short term interest
rates," said Nick Ferres, chief investment officer at Vantage
Point Asset Management in Singapore.
    "If inflation does not continue the disinflation path, we
fear that policy rates have not reached a peak in this cycle,"
he said.
    Also on Tuesday, Alibaba  BABA.N   9988.HK  is expected to
report results and Federal Reserve Chair Jerome Powell is due to
speak at 1400 GMT.
    Uber  UBER.N  announced a $1.25 billion deal to take over
Delivery Hero's  DHER.DE  foodpanda business in Taiwan. Anglo
American  AAL.L  laid out a strategy update that includes
exploring options for its steelmaking coal, nickel and platinum
businesses, as it fends off a takeover bid from BHP  BHP.AX .   
    
    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 as money has
flowed in steadily from mainland buyers.
    Investors have welcomed news China will issue one trillion
yuan in special bonds as a harbinger of spending, while weak
lending data also shows monetary easing is reaching its limit.
Hang Seng volumes last week were the largest in 17 months.
        "Some of my clients are asking me every day what to buy,
when to buy because they still have an underweight position in
Hong Kong stocks," said Steven Leung, executive director at
brokerage UOB Kay Hian in Hong Kong.
        "I think this situation can continue for a while."
    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/ 
    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.
    Australia is expected to announce a budget surplus later on
Tuesday, though in the trading day markets focused on company
news. Shares in New Zealand construction supplier Fletcher
Building  FBU.AX  fell to 21-year low as it warned of a downturn
in home sales.
    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.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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 and Lincoln Feast.)
 ((tom.westbrook@tr.com; +65 6973 8284;))
 
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