Asian Stocks in Tight Range Before China Data Dump: Markets Wrap
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Asian Stocks in Tight Range Before China Data Dump: Markets Wrap
Matthew Burgess
5 min read
(Bloomberg) -- Most Asian stocks traded in narrow ranges early Monday ahead of a swath of Chinese data and following a vow from the nation’s regulators to stabilize markets.
South Korea’s shares and the won rose after President Yoon Suk Yeol was impeached on the weekend. Japanese equities edged higher while Australian stocks dropped and equity futures in China pointed to losses. US futures were little changed after the S&P 500 swung between gains and losses on Friday ahead of a possible hawkish rate cut by the Federal Reserve this week.
The lack of a clear direction in Asian markets comes as investors readied themselves for the final full week of trading this year with a series of central bank meetings including the Fed, Bank of Japan and Bank of England. Traders may begin to take profit on this year’s almost 20% rally in global stocks, which were fueled by gains in US tech shares and euphoria over AI.
“The uncertainty this brings may initially result in further position squaring and limit buying activity in risk,” said Chris Weston, head of research at Pepperstone Group in Melbourne. “With developed market equities having already had such a year, throw in some big event risk and things may be a little funky for traders this week.”
Korea’s Kospi index extended a rally into a fifth day and have now erased all losses since Yoon’s short-lived attempt to impose martial law earlier this month. The Bank of Korea pledged to use “all available policy instruments” to stabilize stock and currency markets after Yoon’s impeachment on Saturday.
“Political turmoil will likely persist but unlikely to cause an extreme market reaction in USD/KRW and Korea rates,” Societe Generale analysts including Suktae Oh wrote in a note to clients. “All this political turmoil should result in monetary and fiscal stimulus actions in the early part of next year.”
Chinese stocks are expected to extend a selloff sparked Friday amid disappointment after Beijing pledged to boost consumption but failed to offer details on fiscal stimulus. Regulators at the weekend vowed more efforts to stabilize the property and equity markets, including increased monitoring of futures and spot trading, ahead of economic data set to be released that includes retail sales and industrial production.
The People’s Bank of China may also keep a cap on the yuan through its daily fixing as the currency faces pressure over the prospect of US tariffs, according to Commonwealth Bank of Australia.
“We expect the PBOC to keep fixing USD/CNY below 7.2000 to offset US dollar strength until there is more clarity on US tariffs,” strategists including Joseph Capurso wrote in a note to clients.
Meanwhile, the world’s biggest bond market remains under pressure, with the Treasury 10-year benchmark having its worst week since October 2023. Treasuries were little changed in early trading Monday while the dollar edged lower after climbing the past two weeks.
After a series of mixed data last week, swaps traders have pared back wagers on the Fed’s easing path. They are now pricing in around three quarter-point rate cuts over the next 12 months. A week ago they had seen better than 50/50 odds of a fourth cut and there may be more pullbacks to come.
French bond futures fell after Moody’s Ratings cut the nation’s credit grade to Aa3 from Aa2, three levels below the maximum rating. France has already been cut to equivalent levels by Fitch and S&P, heaping pressure on the new government to bring a ballooning deficit under control.
In commodities, oil edged lower, paring Friday’s rise as simmering geopolitical conflicts and the prospect of sanctions on Russia and Iran countered projections for a supply glut next year. Gold was steady.
Key events this week:
China retail sales, property prices, industrial production, Monday
Eurozone HCOB Manufacturing and Services PMI, Monday
ECB President Christine Lagarde speaks, Monday
UK S&P Global Manufacturing and Services PMI, Monday
UK jobless claims, unemployment, Tuesday
UK CPI, Wednesday
Eurozone CPI, Wednesday
US rate decision, Wednesday
Japan rate decision, Thursday
UK BOE rate decision
US revised GDP, Thursday
Japan CPI, Friday
China loan prime rates, Friday
Eurozone consumer confidence, Friday
US personal income, spending & PCE inflation, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:32 a.m. Tokyo time
Hang Seng futures fell 0.3%
Nikkei 225 futures (OSE) rose 0.3%
Japan’s Topix was little changed
Australia’s S&P/ASX 200 fell 0.3%
Euro Stoxx 50 futures rose 0.1%
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro rose 0.1% to $1.0512
The Japanese yen was little changed at 153.60 per dollar
The offshore yuan was little changed at 7.2790 per dollar
Cryptocurrencies
Bitcoin rose 2.6% to $105,477.64
Ether rose 3.2% to $3,978.48
Bonds
The yield on 10-year Treasuries was little changed at 4.39%
Japan’s 10-year yield advanced one basis point to 1.050%
Australia’s 10-year yield advanced three basis points to 4.32%
Commodities
West Texas Intermediate crude fell 0.2% to $71.12 a barrel
Spot gold rose 0.1% to $2,651.06 an ounce
This story was produced with the assistance of Bloomberg Automation.
