Yahoo Finance Asian Stocks Rise; Treasuries Steady After Selloff: Markets Wrap
(Bloomberg) -- Asian equities rose, aided by sharp gains in the shares of AI chipmaker Taiwan Semiconductor Manufacturing Co. Treasuries steadied after heavy selling on Thursday, when new signs of vigor in the US economy led traders to trim expectations for rate cuts.
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Shares in Japan climbed, helped along by a weaker yen. Those in China fluctuated while stocks in Australia fell. TSMC jumped as much as 6.3% in opening trade, following a sharp rally Thursday for its US-listed shares driven by strong earnings and an upward revision of its 2024 revenue target.
The chipmaker’s gains helped lift an Asian stocks gauge and placed the benchmark on track for its first daily advance since last week. US futures were flat after the S&P 500 retreated from an intraday record Thursday to end the session little changed.
In Asia, investors will be firmly focusing on China, with gross domestic product data for the third quarter expected to reveal the slowest pace of growth in six quarters. The pace of decline for home prices slowed last month, suggesting that Beijing’s supportive measures are taking effect. Industrial production and retail sales data are also set for release Friday, providing further clarity for investors grappling with the economic support measures unveiled in the prior weeks that have sent Chinese equities whipsawing.
Swaps traders further reduced bets on Federal Reserve rate cuts in the remaining two meetings of the year. Treasuries were steady after a Thursday jump in yields pushed an index of dollar strength higher for a fourth session to a level not seen since early August. Australian and New Zealand yields climbed in early Friday trading, tracking the moves.
The shift in forecasts reflected robust US retail sales in September that exceeded expectations, illustrating resilient consumer spending that continues to power the economy. The data followed a blowout jobs report and a hotter-than-estimated consumer inflation print released earlier this month that only reinforced the view the US is nowhere near a recession.
“There’s a narrow path toward a Fed pause in November, but it would likely require every notable economic report between now and then indicating a stronger-than-assumed US economy,” said Matthew Weller at Forex.com and City Index. “Regardless of what the Fed does in November though, the projected path for interest rates looking out into 2025 and beyond is higher than it’s been in weeks.”
Elsewhere in the region, headline inflation in Japan rose 2.5% as expected. The yen was moderately stronger after passing the psychological level of 150 per dollar Thursday, bringing the risk of official intervention back into focus.
US Economy
A string of stronger-than-estimated data points sent the US version of Citigroup’s Economic Surprise Index to the highest since April. The gauge measures the difference between actual releases and analyst expectations.
The retail sales data released Thursday “highlight undeniable strength across the economy,” said Ellen Zentner at Morgan Stanley Wealth Management. “Strong data will encourage some pushback from Fed participants to cutting again in November, but Chair Jerome Powell is unlikely to be swayed from forging ahead with steady, quarter-point moves.”
“Retail sales came in well above expectations and continue to defy the weak economy thesis,” said Quincy Krosby at LPL Financial. “The implications for monetary policy center on whether the Fed worries that the renewed strength in the economy fuels an uptick in inflation, although expectations remain that there will be a 25 basis-point cut at the next meeting.”
In commodities, gold climbed to a fresh record amid ongoing tensions in the Middle East, while West Texas Intermediate, the US crude price, edged higher to trade around at almost $71 per dollar.
Key events this week:
China GDP, Friday
US housing starts, Friday
Fed’s Christopher Waller, Neel Kashkari speak, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:19 a.m. Tokyo time
Hang Seng futures fell 0.3%
Japan’s Topix rose 0.6%
Australia’s S&P/ASX 200 fell 0.7%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0830
The Japanese yen rose 0.1% to 150.04 per dollar
The offshore yuan was little changed at 7.1348 per dollar
Cryptocurrencies
Bitcoin rose 0.5% to $67,290.99
Ether rose 0.2% to $2,601.45
Bonds
The yield on 10-year Treasuries was little changed at 4.09%
Japan’s 10-year yield advanced one basis point to 0.970%
Australia’s 10-year yield advanced six basis points to 4.30%
Commodities
West Texas Intermediate crude rose 0.2% to $70.81 a barrel
Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
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