Stock Rally to Stall in Asia; Dollar Holds Gains: Markets Wrap

Sep 20, 2017 5:16 pm ET

(Bloomberg) -- The rally in risk assets is taking a breather ahead of key data on China’s economy and U.S. inflation. The dollar held on to gains triggered by revived hopes for U.S. tax reform.

Asian stock futures pointed to a mixed start to Thursday trading after the S&P 500 Index eked out a fresh record high. The dollar was supported by a slight increase in expectations of a U.S. interest-rate hike this year and President Donald Trump’s push for bipartisan support on tax reform. U.S. consumer price data due Thursday may sway arguments on the chance of any further tightening this year, while in the U.K. the Bank of England is expected to stand pat in its policy decision.

Data on Chinese retail sales, industrial production and fixed-asset investment will provide the latest clues on the strength of the world’s second-largest economy after global equities reached all-time highs this week. Renewed hope for a U.S. tax overhaul was spurred by House Speaker Paul Ryan saying the plan is to have a new tax system functioning next year.

Terminal subscribers can read more in our Markets Live blog.

Still to come this week:

  • First up is Australia’s monthly jobs report for August. The economy probably added fewer jobs than in July, while the unemployment rate is expected to remain steady.
  • China’s August industrial production, retail sales and fixed-asset investment is the big ticket item in Asia on Thursday.
  • While the BOE is expected to stand pat, its dilemma over how to cope with rising inflation and stagnant wages will be on full view Thursday in London. For more on that, click here. 
  • The highlight for the U.S. session will be the consumer-price data.

Here are the main moves in markets:

Stocks

  • Futures on S&P 500 Index were little changed as of 7:05 a.m Tokyo time. The underlying gauge rose 0.1 percent on Wednesday.
  • Futures on Japan’s Nikkei 225 Stock Average added 0.2 percent. 
  • Contracts on Australia’s S&P/ASX 200 Index were little changed as were those on South Korea’s Kospi index.
  • Hang Seng Index futures in Hong Kong lost 0.3 percent.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.4 percent on Wednesday, up for a third day.
  • The yen was at 110.47 per dollar after slipping 0.3 percent on Wednesday.
  • The Aussie bought 79.85 U.S. cents. It lost 0.4 percent on Wednesday.
  • The kiwi was at 72.43 U.S. cents.

Bonds

  • The yield on 10-year Treasuries rose two basis points to 2.19 percent on Wednesday, extending its surge after nearing the 2 percent level earlier this month.

Commodities

  • Gold was at $1,322.92 an ounce.
  • West Texas Intermediate crude was flat after surging 2.2 percent overnight to $49.30 a barrel. Global oil demand will climb this year by the most since 2015, the International Energy Agency said, amid stronger-than-expected consumption in Europe and the U.S.

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