2023-10-24 06:18:20
Asian stocks edged higher on Tuesday, to just shy of their lowest level since November 2022, while the dollar weakened, with traders avoiding bets ahead of economic data expected to provide clues on next steps of the American Federal Reserve.
Oil prices recovered some of the previous day’s losses as markets feared the war between Israel and Hamas could escalate into a broader conflict in the oil-exporting region.
MSCI’s broadest index of Asia-Pacific shares outside Japan reversed losses to trade 0.41% higher at 476.72, from an earlier level of 472.73, the lowest since November 2022.
Down 3% over the month, the index should experience a third consecutive month in the red. Japan’s Nikkei was up 0.21% after falling 1.4%.
Futures showed European stocks set to open lower, with the Eurostoxx 50 down 0.10%, Germany’s DAX down 0.11% and the FTSE down 0.16%. .
“The looming specter of inflation becomes even more imposing, especially considering the recent surge in oil prices,” said Gary Dugan, chief investment officer of Dalma Capital.
“If oil prices continue at this level through the remainder of 2023 and into 2024, this could potentially inject a further surge of inflation into the global economy.”
Investors’ attention this week will be divided between results from high-profile companies, such as Facebook parent Microsoft, Meta Platforms and Amazon, as well as a series of economic data ahead of the Fed meeting this week. will be held from October 31 to November 1.
The US Commerce Department will announce third-quarter gross domestic product on Thursday, while the report on personal consumption expenditures (PCE), the US central bank’s preferred inflation gauge, is due on Friday.
But before that, investors will analyze quick Purchasing Managers’ Index (PMI) data from Britain, France, the Eurozone and the United States, due later on Tuesday .
The avalanche of data comes ahead of central bank meetings over the next two weeks, with the European Central Bank due to meet on Thursday and expected to keep rates unchanged, according to a Archyde.com poll of 85 analysts.
“It is already reasonable to suggest that the ECB will not move on rates this week, with the October PMIs simply serving to highlight how weak the European economy remains,” said Michael Hewson, chief analyst at CMC Markets in London.
Chinese stocks remained under pressure, with Hong Kong’s Hang Seng Index down 0.68%, although the Shanghai Composite Index rose 0.32%.
China’s CSI300 blue chip index remained stable after closing at its lowest level in 4 1/2 years on Monday.
Investor confidence remained weak even after state fund Central Huijin bought exchange-traded funds to prop up the flagging market.
The yield on the benchmark 10-year U.S. Treasury note was up 0.80 basis points at 4.846% in Asian hours on Tuesday, following the previous day’s rapid decline after a brief rise above 5 .0%.
The rise in yields on 10-year Treasury notes, seen as a safe haven in times of economic uncertainty and a benchmark for global borrowing costs, has been fueled in part by investors counting on stronger growth in the UNITED STATES.
On Monday, billionaire investor Bill Ackman said he had hedged his earlier bets against Treasuries, hoping that the war between Israel and Hamas would push more investors to invest in U.S. Treasuries.
On the currency market, the dollar remained weak against a basket of currencies, after the 0.5% decline recorded on Monday. The dollar index was down 0.076% at 105.52.
The yen remained under pressure but benefited from the decline in the dollar.
The Japanese currency was at 149.74 per dollar, after hitting the key level of 150 on Friday and Monday, which markets said could prompt authorities to intervene to support the currency.
When it comes to cryptocurrencies, bitcoin has come back into vogue as speculation about the possibility of an exchange-traded fund has generated excitement and prompted short sellers to exit their positions.
The world’s largest cryptocurrency traded as high as $35,198, hitting an 18-month high, before falling back to $34,427, up 4% on the day.
In commodities, West Texas Intermediate crude oil futures rose 0.32% to $85.76 a barrel, while Brent was up 0.33% at $90.13.
Spot gold rose 0.2 percent to $1,975.49 an ounce.
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