Morning Bid: Dollar, US yields deliver one-two punch
Asian market sentiment is expected to be cautious and nervous due to the strength of the U.S. dollar, rising bond yields, tightening financial conditions, and concerns over China's economy.
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Posted 8/16/2023, 9:47:00 PM
reuters.com
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Asian stocks, particularly Chinese markets, may find some relief after Wall Street's resilience in the face of rising bond yields, though economic data from China remains underwhelming and foreign investors continue to sell Chinese stocks.
Asian markets are expected to follow the global trend of weakness in stocks, a buoyant dollar, elevated bond yields, and souring investor sentiment, with no major catalysts to change the current market condition.
The Chinese bond market is experiencing a significant shift due to concerns over China's economic growth prospects, including a bursting property bubble and lack of government stimulus, leading to potential capital flight and pressure on the yuan, which could result in increased selling of US Treasuries by Chinese banks and a rethink of global growth expectations.
Bond market investors will closely watch U.S. jobs data and European inflation numbers, while China's efforts to stabilize its markets and economy continue, and the impact of El Nino poses a threat to global food supplies.
Asian markets will be influenced by economic indicators, policy steps, and diplomatic signals from China, as well as reacting to the Jackson Hole speeches, purchasing managers index reports, GDP data, and inflation figures throughout the week, with investors desperate for signs of economic improvement as China's industrial profits continue to slump and authorities take measures to stimulate the capital market.
Global investors are skeptical of China's ability to stabilize its financial markets, with many predicting that economic pressures will cause the offshore exchange rate of the yuan to reach record lows.
Asian shares rally as China announces new measures to support its struggling markets, while investors remain cautious ahead of U.S. jobs and inflation data that could impact interest rates.
Asian markets rose on Monday after Federal Reserve chief Jerome Powell indicated a cautious approach to interest rate hikes, and Chinese shares surged following a cut in the duty on trades by the government.
Asia-Pacific markets are expected to rise, following Wall Street's positive performance, with Japan's Nikkei 225 leading gains, and airline stocks outperforming.
The US dollar was cautious as traders awaited economic data, while the yen struggled near intervention levels as the dollar remained strong.
Shares in Asia are set to rise as US economic reports indicate slowing growth and the possibility of a more cautious approach by the Federal Reserve, with investors adopting a "bad news is good news" strategy.
Asian stocks may face a volatile session as investors monitor U.S. economic data, a second China manufacturing PMI reading, and the U.S. employment report, with any indication of central bank leaders approaching the end of tightening likely to generate risk appetite.
Asian stocks are poised for modest gains as traders consider US jobs data suggesting the Federal Reserve may be close to the end of its tightening cycle.
Asian stocks are expected to open lower as traders focus on China's economic conditions and European shares fail to provide a strong lead, while oil and bond yields remain relatively high.
Investors are concerned about the possibility of intervention in Tokyo after the yen reached its weakest level against the dollar in 10 months, while Asian markets fell due to worries of another US Federal Reserve interest rate hike and a jump in oil prices.
Asia stocks fall as weak economic data in China and Europe raise concerns over global growth, while the dollar strengthens as investors assess the outlook for U.S. interest rates.
Asian markets are expected to open on a defensive note due to concerns over Chinese trade activity, rising US bond yields, high oil prices, and a selloff on Wall Street.
Asian equities face a cautious start to trading while the yen strengthens following potentially hawkish remarks from the Bank of Japan governor, with futures for Australia slightly higher, US-listed Chinese stocks falling, and contracts for Japan showing a small gain.
Asia stock markets are softer ahead of U.S inflation data, with investors looking for signals about the Federal Reserve's next moves on interest rates.
Stock prices in Asia were mostly higher as investors awaited updates on U.S. inflation and China's economic data, while concerns about rising oil prices and possible higher interest rates weighed on markets.
Asian markets are expected to be on the defensive due to sagging stocks and rising oil prices, as investors await U.S. inflation figures that will impact the Fed's rate decision; China's real estate sector is seen as the most likely source of a global systemic credit event.
Asian stocks rise as US CPI data solidifies Federal Reserve pause bets, leading to a positive market sentiment and a weaker US Dollar.
Asian markets are expected to finish the week strong due to positive movements in the U.S. and Europe, although the release of economic data from China may dampen the mood, as it includes indicators such as house prices, fixed asset investment, and unemployment. The Chinese government is aiming to support the economy, but doubts remain about reaching the 5% GDP growth target and trade relations with the West continue to deteriorate. However, if investors continue with the bullish momentum from Thursday, these concerns may be temporarily set aside.
Risk appetite remains high in the market as Asian markets follow the rally in Wall Street; China's policy support measures, strong business activity data, and positive IPO of Arm contribute to the optimistic market sentiment.
The performance of Alibaba and JD.com stocks suggests that investors are uncertain about whether China's economy is improving despite positive Chinese data.
Investors are becoming increasingly cautious about the US stock market and the economy as 2023 draws to a close, leading to a more defensive investment approach by Wall Street banks and experts warning of potential pain ahead.
Asian shares open cautiously as central bank meetings, including the Federal Reserve and Bank of Japan, loom; oil prices near 10-month highs and the US dollar remains strong.
Concerns over demand in the global chip sector, as well as strikes at major automaker factories, are weighing on sentiment in Asian markets, while the Bank of Japan's policy meeting and central bank decisions in the US and UK will be closely watched this week.
Asian shares sink on worries about the Chinese property sector and Japanese investors sell chip stocks, while benchmark U.S. Treasury yields and the dollar remain high ahead of key central bank decisions.
Asian markets open with a decline, primarily driven by chip- and AI-related shares, while concerns about China's economy persist, disrupting the calm ahead of several central bank meetings this week.
China is expected to maintain its benchmark lending rates as oil prices rise and market sentiment is affected; meanwhile, the Federal Reserve's policy meeting, Japan's trade data, and the United Nations General Assembly will also influence Asian markets.
Asia-Pacific markets are expected to continue declining as investors wait for China's loan prime rates and the U.S. Federal Reserve's rate decision, while oil prices rise due to supply concerns and all 11 sectors in the S&P 500 trade down.