- Asian stock markets:
- China holds the interest rate
- Companies Thai baht after the victory of the opposition in the elections
- Biden is scheduled to meet with lawmakers on Tuesday about the debt ceiling
- A group of Fed officials are scheduled to speak this week
SYDNEY (Reuters) – Asian stocks started the week on a cautious note as investors prepare for the release of China’s manufacturing and retail data, while they wait for a group of US Federal Reserve officials to speak to anchor the market for rate cuts this year. .
S&P 500 and Nasdaq futures fell 0.1% in early trade, after a report released on Friday showed that US consumer confidence fell to a six-month low in May and long-term inflation expectations jumped to their highest since 2011, putting them at risk. The US dollar and the US dollar strengthened. Treasury returns.
In emerging markets, the Turkish lira fell to a two-month low after the weekend elections appeared headed for a runoff, while the Thai baht gained nearly 1% after the Thai opposition defeated military-aligned parties also in the weekend elections.
On Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fluctuated between losses and gains and was last up 0.1%. Japan’s Nikkei (.N225) bucked the trend with a gain of 0.5%, based on optimism from last week during earnings season.
China’s blue-chip index (.CSI300) was flat in early trade, after sliding 2% last week, while Hong Kong’s Hang Seng Index (.HSI) rose 0.3%, after also being hit by 2.1%.
The country’s central bank on Monday rolled over medium-term policy loans due while keeping interest rates unchanged, despite disappointing data last week that fueled concerns about a global slowdown.
China is scheduled to release monthly industrial production, retail sales and fixed-asset investment data on Tuesday.
“The large year-over-year improvement should not be surprising given that it is measured against a stagnant economy that was in lockdown,” said Chris Weston, head of research at Pepperstone.
“However, with China data raising some concerns recently – we’ve seen weak imports, PPI, loan data – China’s growth is at the heart of the market’s moves,” Weston said.
Also this week, a number of Fed officials are speaking, with Chair Jerome Powell’s appointment on Friday, and that could generate plenty of headlines to move the call further.
Markets still see this as a peak for Fed Funds rates and rates of 70 basis points in cuts by the end of this year, after last week’s CPI and PPI data supported a Fed pause as inflation slowed.
Federal Reserve Governor Michelle Bowman said on Friday that the US central bank may need to raise interest rates more if inflation remains high.
Joseph Capurso, Head of International Economics at the Commonwealth Bank of Australia, believes that continued inflation in the US will affect the prices of near-term cuts in the money rate, and contribute to the recovery of the dollar in the coming months.
The US dollar was hovering around a five-week high against major currencies on Monday, extending its best weekly rally since September from the previous week. It was last trading at 102.64, after rising 1.4% last week on global growth concerns.
Most of what investors were concerned about was the uncertainty about raising the US debt ceiling and the return of bank concerns. US President Joe Biden expects to meet congressional leaders on Tuesday for talks to raise the country’s debt limit and avoid a catastrophic default.
Concerns about the US Congress failing to raise the debt ceiling on time have caused major distortions at the short end of the yield curve as investors avoid maturing bonds when the Treasury risks running out of money, flocking to alternative issues.
The yield on the benchmark 10-year note was little changed at 3.4588%, after rising 6 basis points on Friday, and the 2-year yield slipped 2 basis points, to 3.9830%, after also jumping 10 basis points in the previous session.
Oil prices fell for the fourth consecutive session. US crude futures fell 0.5% to $69.71 a barrel, while Brent crude futures fell 0.6% to $73.74 a barrel.
Gold prices rose 0.2% to $2,014.95.49 an ounce.
Reporting by Stella Keough; Editing by Sonali Paul
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