(Bloomberg) — Asian stocks rose as investors digested better-than-expected Chinese economic data and details of the country’s central bank’s additional share buyback program.
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Stocks in China and Hong Kong continued to rise after the People’s Bank of China said it had set up a refinancing mechanism for an initial line of 300 billion yuan ($42.1 billion) of bank loans to be used for share buybacks. Earlier, the data also showed the country’s latest gross domestic product, industrial production and retail sales came in better than expected.
Asian stock indexes are on a daily upward trajectory for the first time since last week, as semiconductor manufacturers rose on strong earnings from Taiwan Semiconductor Manufacturing Co., Ltd. Shares of the Taiwanese chipmaker rose as much as 6.3% at the start of trading. The weak yen also provided a tailwind, and Japanese stock prices rose.
Peiqiang Liu, Asia economist at Fidelity International, told Bloomberg TV that the central bank will “reduce the cost of financing the real economy so that businesses and households can re-leverage” and provide further liquidity support. He said he is focusing on that.
U.S. futures were flat after the S&P 500 retreated from Thursday’s intraday highs to close little changed. U.S. Treasuries were firmer on Thursday after a heavy sell-off as the U.S. economy showed signs of new vitality and traders dialed back expectations for interest rate cuts.
The dollar strength index rose for the fourth time in a row to the highest level since early August. Yields in Australia and New Zealand followed suit, rising in early trade on Friday.
Elsewhere in Asia, Japan’s headline inflation rate rose by 2.5%, as expected. The yen rose slightly after passing the psychological level of 150 yen to the dollar on Thursday, bringing the risk of government intervention back into focus.
Statistics released by China on Friday showed that the pace of decline in house prices slowed last month, suggesting that the Chinese government’s support measures are having an effect. Investors are also paying attention to the People’s Bank of China’s re-lending mechanism, which has a one-year maturity and an interest rate of 1.75%, according to a statement from the People’s Bank.
us economy
With the U.S. economy performing well, swap traders further trimmed their bets on the Federal Reserve cutting interest rates in its two remaining meetings this year. The change in forecast reflects stronger-than-expected U.S. retail sales in September, indicating resilient consumer spending that continues to drive the economy.
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The figures follow explosive jobs numbers and worse-than-expected consumer inflation data released earlier this month, which only reinforced the view that the U.S. is far from a recession.
A series of better-than-expected data pushed Citigroup’s U.S. Economic Surprise Index to its highest level since April. This gauge measures the difference between actual releases and analyst expectations.
Ellen Zentner of Morgan Stanley Wealth Management said Thursday’s retail sales statistics “underscore the undeniable strength of the overall economy.” “While strong data will likely give Fed participants some pushback on further rate cuts in November, Chairman Jerome Powell is unlikely to budge from moving forward with a steady quarter-point move.”
In commodities, gold rose to an all-time high amid continued tensions in the Middle East, and the price of US crude oil, West Texas Intermediate, rose slightly to trade near $71 to the dollar.
This week’s main events:
China GDP, Friday
U.S. housing starts Friday
Fed’s Christopher Waller and Neel Kashkari speak on Friday
The main movements in the market are:
stock
S&P 500 futures were little changed as of 11:08 a.m. Tokyo time.
Japan’s TOPIX rose 0.2%
Australia’s S&P/ASX 200 falls 0.8%
Hong Kong’s Hang Seng rose 0.4%
The Shanghai Composite fell 0.3%.
Euro Stoxx50 futures fell 0.1%
currency
Bloomberg Dollar Spot Index little changed
The euro was almost unchanged at $1.0836.
The Japanese yen remained almost unchanged at 150.06 yen to the dollar.
The offshore yuan was almost unchanged at 7.1338 yuan to the dollar.
cryptocurrency
Bitcoin rose 1.4% to $67,850.85.
Ether rose 1.4% to $2,634.13
bond
The 10-year government bond yield was almost unchanged at 4.09%.
Japan’s 10-year bond yield rose 1.5 basis points to 0.975%.
The Australian 10-year bond yield rose 6 basis points to 4.31%.
merchandise
West Texas Intermediate crude rose 0.4% to $70.95 a barrel.
Spot gold rose 0.5% to $2,706.14 an ounce.
This article was produced in partnership with Bloomberg Automation.
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