(Bloomberg) — Asian stocks fell from session highs as investors weighed China’s efforts to prop up markets and the impact of a series of cautious comments from U.S. Federal Reserve officials.
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Hong Kong stocks reversed gains in morning trading, but mainland stocks were volatile, pointing to doubts about the effectiveness of Beijing’s measures to stabilize the market. Chinese markets will be closed for the week-long Lunar New Year holiday starting Friday, so volatility is likely to increase.
Asian stock indexes hit their highest levels in more than a month. Japanese stocks slumped amid mixed results from major companies such as Toyota Motor Corporation, Mitsubishi Corporation, and Daikin Industries. The U.S. and European contracts remained largely unchanged.
Charl Chanana, head of currency strategy at Saxo Capital Markets, said: “Expectations for public support for the Chinese market are supporting the rally in Asian stocks, and a rebound on expectations for Fed rate cuts has not been priced in for now. It seems like there is.” “However, the effect may be temporary as these are all band-aids and cannot solve the structural problems facing China, from the real estate sector to lack of productivity.”
The yield on the 10-year US Treasury note fell in early trading in Asia. Bonds rallied in U.S. trading after a three-year bond auction drew solid demand, boosting sentiment ahead of Wednesday’s record $42 billion sale of 10-year notes.
The dollar strengthened after Tuesday’s decline. The drumbeat from Fed officials was a signal from Chairman Jerome Powell that the central bank is in no hurry to ease policy.
Cleveland Fed President Loretta Mester said if the economy progresses as expected, policymakers will likely feel confident in cutting rates “later this year.” Neil Kashkari of Minneapolis praised the significant improvement in inflation but said he thought more progress was needed.
New York Community Bancorp’s credit rating comes less than a week after the community lender announced it was building up reserves to cover deterioration in loans related to commercial real estate, according to Moody’s Investors.・Reduced to junk by service.
In New Zealand, bond yields rose after the country’s strong jobs report, suggesting the central bank may remain cautious about cutting interest rates. The local currency and the Australian dollar rose slightly for the second day in a row.
Elsewhere, oil prices traded in a narrow range after two days of gains as geopolitical risks in the Middle East were partially offset by reports of expanding stockpiles in the United States.
In the corporate world, Toyota, the world’s No. 1 automaker, posted further profit gains on Tuesday after raising its full-year operating profit outlook. Mitsubishi Corporation soared after announcing a share buyback and a better-than-expected quarterly profit. Yum China Holdings soared on sales. Alibaba Group Holding Ltd. will report later in the day.
This week’s main events:
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German industrial production Wednesday
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Walt Disney earnings Wednesday
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Fed’s Adriana Kugler and Tom Barkin speak on Wednesday
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China PPI, CPI, Thursday
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U.S. wholesale inventories, new unemployment claims, Thursday
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Treasury Secretary Janet Yellen speaks Thursday at the Senate Banking Committee’s hearing on the Financial Stability Oversight Council Annual Report.
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Pharmaceutical CEOs speak Thursday before the Senate Committee on Prescription Drug Pricing
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ECB chief economist Philip Lane speaks on Thursday
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ECB releases economic news on Thursday
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US CPI revisions Friday
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German Consumer Price Index, Friday
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President Joe Biden hosts German Chancellor Olaf Scholz at the White House on Friday.
The main movements in the market are:
stock
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As of 2:23 p.m. Tokyo time, S&P 500 futures were unchanged.
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Japan’s TOPIX rose 0.3%
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Hong Kong’s Hang Seng fell 0.4%.
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The Shanghai Composite rose 0.5%.
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Euro Stoxx50 futures little changed
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Nasdaq 100 futures little changed
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0760.
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The Japanese yen was almost unchanged at 147.97 to the dollar.
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The offshore yuan was almost unchanged at 7.2032 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6526.
cryptocurrency
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Bitcoin fell 0.5% to $42,958.61.
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Ether fell 0.7% to $2,363.51.
bond
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The 10-year Treasury yield fell 1 basis point to 4.09%.
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Japan’s 10-year bond yield fell 1 basis point to 0.705%.
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Australian 10-year bond yield falls 3 basis points to 4.09%
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Rob Verdonck and Zhu Lin.
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