A gauge of Asian stocks headed for its first advance this week as a rally in Japanese shares provided a counterweight to global markets facing the prospect of further interest rate hikes from the Federal Reserve. A modest 0.5% advance for Japan’s Topix index on Thursday added to a string of gains that’s taken the benchmark to the highest level since 1990. Investors have warmed to corporate reforms, rising profitability and the return of inflation to Japan. Goldman Sachs Group Inc. analysts are among those who are upbeat on Japan, forecasting the Topix to rise about 8% from its current level in 12 months. South Korean stocks also ticked higher, Australian shares dropped and markets were closed for holidays in Hong Kong, mainland China and Taiwan, reducing activity in region. Futures contracts for the S&P 500 and Nasdaq 100 edged lower after after the two benchmarks fell for a third consecutive session Wednesday. Investors are rethinking the bullish spirits unleashed by last week’s Fed rate pause after Chair Jerome Powell underscored the need to tame inflation during his semi-annual report to Congress on Thursday. Powell warned that higher rates were needed and two more rate hikes this year was “a pretty good guess.” Separately, Atlanta Fed President Raphael Bostic, who isn’t among officials voting on rates this year, said he supported holding the central bank’s benchmark. Chicago Fed chief Austan Goolsbee, who does vote in 2023, said the decision to hold rates steady last week was a “close call.” Treasury yields were broadly flat in Asian trading after shorter maturity yields rose as Powell’s signal of higher rates fanned recession worries. The rise in short-dated yields pushed the inversion of a key segment of the yield curve to a full percentage point for the first time since March. Australia’s 10-year yield fell three basis points, while New Zealand’s yield of the same maturity moved four basis points higher. The yen strengthened slightly but remained close to 142 per dollar. The Bloomberg dollar index was little changed. Other central banks will also be in focus Thursday for markets, with a wave of decisions spanning Asia and Europe. Among them, policymakers are seen keeping rates on hold in Philippines and Indonesia and raising them in Switzerland, Norway and the UK. Traders are betting the Bank of England will have to accelerate the pace of interest-rate hikes after data Wednesday showed inflation remained at 8.7%, higher than expected for a fourth month. While the BOE is seen raising rates by 25 basis points to 4.75%, the risk of a larger half-point increase is growing. Traders also lifted expectations for the terminal rate to 6%, which would be the highest since the turn of the century. Two-year gilt yields rose to levels last seen in 2008. Traders are betting the Bank of England will have to accelerate the pace of interest-rate hikes after data Wednesday showed inflation remained at 8.7%, higher than expected for a fourth month. While the BOE is seen raising rates by 25 basis points to 4.75%, the risk of a larger half-point increase is growing. Traders also lifted expectations for the terminal rate to 6%, which would be the highest since the turn of the century. Two-year gilt yields rose to levels last seen in 2008. US After Hours KBH +0.7% ticks higher on earnings; CDMO -21% falls on earnings; AAOI +13.8% pops on MSFT supply deal; LOGI +2.1% higher on buyback authorization.
Nikkei -0.71% Hang Seng Closed CSI Closed Shanghai Closed Shenzen Closed
Eur$ 1.0989 CNH 7.1822 CNY 7.1795 JPY 141.84 GBP 1.2756 CHF 0.8928 RUB 84 TRY 23.5726 WTI$ 72.15 -0.52% Gold 1,929 -0.20% BTC 30,320 +1.12% ETH 1916 +1.93%
S&P -0.19% Nasdaq -0.35% EuroStoxx -0.62% FTSE -0.74% Dax -0.60% SMI -0.38%
Macro :
- EU’s Von Der Leyen Warns Vestager on EIB Conflict of Interest
- Ukraine Says Russia Gas Flows Through Country May End in 2024:FT
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