Stocks in Asia were poised to follow a rebound in the US as the month and quarter draw to a close, while oil’s rally faltered and Treasury yields fell.
Equity futures for benchmarks in Japan, Australia and Hong Kong rose. Contractsfor the S&P 500 and Nasdaq 100 also pointed to advances after the US indexes gained on strong performances by tech behemoths including Nvidia Corp. and Meta Platforms Inc. Meanwhile, Treasury yields slipped from 16-year highs on weak consumer spending data and dovish Fed comments.
Oil tempered this week’s rally as investors cashed out. The commodity has gained for a fourth month, and is set for its best quarter since March 2022, following production cuts by OPEC+ linchpins Saudi Arabia and Russia.
September is still shaping up to be the worst month in 2023 for the US stock benchmarks and the weakest month for global bonds since February after the Federal Reserve left interest rates at the highest in 22 years at its last meeting.
The dollar snapped six sessions of gains on Thursday, with the yen strengthening against the greenback ahead of the release of key industrial production, retail sales, and labor figures in Japan. Meanwhile, China starts its Golden Week holiday on Friday, which may damp trading in the region through the first week of October.
In the US, dovish-leaning comments from one policymaker and weak consumer spending data helped stoke hope for some easing of the Fed’s messaging. Even if the US enters a recession it should be able to skirt a more severe downturn, according to Richmond Fed President Tom Barkin. Chair Jerome Powell sidestepped investor concerns over the outlook for interest rates at an event.
It’s still too early to know if another rate increase will be needed, Barkin told Bloomberg Television. Earlier, the Chicago Fed’s Austan Goolsbee said policymakers were at risk of overshooting on interest rates by putting too much emphasis on the idea that steep job losses are needed to quell inflation.
Read more: Powell Says Public’s Understanding Key to Fed Impact on Economy
Personal consumption, the main driver of the US economy, rose an annualized 0.8% in the April-to-June period, the weakest advance in over a year. Other data showed GDP rose at an unrevised 2.1% rate during the period while weekly jobless claims came in lighter than estimates. Traders will next be looking to Friday data on the Fed’s preferred measure of inflation — the personal consumption expenditures price index.
Key events this week:
- Eurozone CPI, Friday
- Japan unemployment, industrial production, retail sales, Tokyo CPI, Friday
- US consumer spending, wholesale inventories, University of Michigan consumer sentiment, Friday
- ECB President Christine Lagarde speaks, Friday
- New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 8:28 a.m. Tokyo time. The S&P 500 rose 0.6%
- Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 0.8%
- Hang Seng futures rose 0.9%
- S&P/ASX 200 futures rose 0.6%
- Nikkei 225 futures rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0562
- The Japanese yen was little changed at 149.26 per dollar
- The offshore yuan was little changed at 7.2943 per dollar
- The Australian dollar was little changed at $0.6428
Cryptocurrencies
- Bitcoin fell 0.2% to $27,033.8
- Ether fell 0.2% to $1,653.25
Bonds
- The yield on 10-year Treasuries declined three basis points to 4.57%
- Australia’s 10-year yield advanced four basis points to 4.49%
Commodities
- West Texas Intermediate crude rose 0.1% to $91.82 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.