Asia stocks follow Wall Street rally; dollar eases: Markets wrap

Stocks advanced in Asia Wednesday after Wall Street rallied on corporate earnings and indications that the Federal Reserve is open to slowing the pace of interest-rate hikes.

Australian and South Korean edged higher and equity futures in Hong Kong climbed after the S&P 500 closed at its highest level since mid September. Upbeat earnings from Best Buy Co. and Abercrombie & Fitch Co. bolstered sentiment.

Still, the Golden Dragon index of US-listed Chinese equities fell for the third session in a run of declines that’s wiped 8% from the gauge. China stocks have fallen this week on rising Covid-19 cases and signs of new restrictions.

Reports that Ant Group Co. faces a fine of more than $1 billion from China’s central bank triggered speculation that the company, which is partly owned by Alibaba Group Holding Ltd., may be able to move past its problems with regulators to rekindle efforts to list its shares.

The dollar edged lower after snapping a three-day climb. New Zealand’s dollar climbed after the country’s central bank raised interest rates 75 basis points.

Bitcoin held recent gains after rising as much as 4.2% Tuesday to snap the digital asset from its lowest price since November 2020.

A rally in Treasuries pushed the benchmark 10-year yield to 3.76% on Tuesday. There will be no trading of cash Treasuries in Asia on Wednesday with Japan closed for a holiday.

Oil rose amid an uncertain supply outlook alongside a proposal by the European Union to soften Russian crude sanctions.

US manufacturing data fell below forecasts, confirming the peak inflation narrative. San Francisco Fed President Mary Daly has said that officials need to be mindful of the lags in the transmission of policy changes, while her Cleveland counterpart Loretta Mester said she’s open to moderating the size of rate hikes.

“We think the Fed leadership wants to get off the 75-basis-point-a-meeting hamster wheel even though it is finding it hard to do so while maintaining control of financial conditions,” Evercore ISI’s Krishna Guha wrote in a note. “We think the Fed is still heading for a ‘hawkish slowing.’ And, for us at least, the slowing part is what matters.” – BLOOMBERG

Key events this week:

  • S&P Global PMIs: US, Euro area, UK, Wednesday
  • US MBA mortgage applications, durable goods, initial jobless claims, University of Michigan sentiment, new home sales, Wednesday
  • Minutes of the Federal Reserve’s Nov. 1-2 meeting, Wednesday
  • ECB publishes account of its October policy meeting, Thursday
  • US stock and bond markets are closed for the Thanksgiving holiday, Thursday
  • US stock and bond markets close early, Friday

Some of the main moves in markets:

Stocks

  • Futures on the S&P 500 were little changed as of 10:11 a.m. Tokyo time. The S&P 500 rose 1.4%
  • Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 1.5%
  • Hang Seng futures rose 0.3%
  • Australia’s S&P/ASX 200 Index rose 0.8%
  • South Korea’s Kospi index rose 0.6%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0310
  • The Japanese yen was little changed at 141.14 per dollar
  • The offshore yuan was little changed at 7.1420 per dollar

Cryptocurrencies

  • Bitcoin rose 0.2% to $16,166.16
  • Ether rose 0.1% to $1,130.91

Bonds

  • The yield on 10-year Treasuries declined seven basis points to 3.76% Tuesday
  • Australia’s 10-year yield declined four basis points to 3.56%

Commodities

  • West Texas Intermediate crude rose 0.5% to $81.39 a barrel
  • Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.