- MSCI Asia set for third weekly gain; S&P 500 erased Aug. loss
- S., Chinese data indicate global growth is on firm footing
Most Asian stocks advanced as investors await a U.S. jobs report for clues on the Federal Reserve’s policy-tightening path due Friday ahead of a long weekend in America. The yen and the euro dropped for a third day this week.
Equities rose in Tokyo and Sydney after the MSCI Asia Pacific Index completed its eighth straight month of gains and nudged closer to its highest in almost a decade. Energy stocks on the regional gauge were among the biggest gainers as a group. Japan’s benchmark bond yield fell below zero percent for the first time since November. The yen was on track for its worst week in two months. The dollar was steady after declining on weak inflation data and as U.S. Treasury Secretary Steven Mnuchin said a weaker currency is “somewhat better” for trade. Australian bond yields fell with those on U.S. Treasuries.
U.S. consumer spending increased by less than estimated in July, though rising incomes and an upward revision to June purchases put the economy on a stable footing for the second half. The focus now turns to jobs data on Friday for more clarity on the next move in interest rates from the Fed. The latest economic statistics reinforced that price pressures remain benign, while GDP and jobs growth are robust.
In Asia, Caixin’s China PMI beat estimates to rise to the highest since February, underscoring sound growth as the backdrop of the once-every-five years Communist Party Congress that will be held on Oct. 18 in Beijing, where delegates plot China’s course over the next five years.
Asian equities are poised to advance for a third week as investors shrugged off geopolitical concerns after North Korea lobbed a missile over Japan. Risk appetite returned as diplomatic efforts to contain the hermit kindgom’s nuclear program continue.
Among other key events this week:
- Various Asia PMIs, also those for Germany, France U.K. and the euro zone ahead of the European Central Bank rates decision next week.
- Capital investment by Japanese companies fell well short of expectations in the second quarter.
- South Korea’s consumer prices rose at the fastest pace since 2012, while GDP increased 2.7 percent in the second quarter from a year earlier.
- S. non-farm payrolls data for August is due Friday, along with unemployment and earnings numbers, and the Markit U.S. PMI. U.S. employment probably increased by 180,000 in August, in line with this year’s monthly average, while the jobless rate held at 4.3 percent, economists forecast.
- Singapore, Malaysia, Indonesia and the Philippines are closed for holidays.
And here are the main moves in markets:
Stocks
- Japan’s Topix index rose 0.1 percent at the close in Tokyo. The Kospi index in South Korea fell 0.2 percent and Australia’s main gauge added 0.2 percent.
- Hang Seng Index in Hong Kong fluctuated with the Shanghai Composite Index.
- Contracts on the S&P 500 were up less than 0.1 percent in early European trading after the underlying measure rose 0.6 percent.
- Futures on the Euro Stoxx 50 climbed 0.3 percent as of 7:34 a.m. London time.
- The MSCI Asia Pacific Index climbed 0.1 percent.
Currencies
- The yen fell 0.2 percent to 110.15 per dollar. It’s headed for a 0.7 percent decline this week, it’s worst performance since July 7.
- The Bloomberg Dollar Spot Index rose 0.1 percent after losing 0.2 percent.
- The euro fell to $1.1893 after climbing to near the strongest since 2015.
Bonds
- Japan’s 10-year yield dropped to -0.005 percent, after first reaching zero percent -- the level the central bank targets -- on Tuesday when North Korea launched a missile over Japan. The Bank of Japan cut back on purchases of debt maturing in three-to-five years at its first bond-buying operation for September as yields fell.
- The yield on 10-year Treasuries was steady at 2.12 percent. It fell 18 basis points last month.
- The Australian 10-year bond yield fell five basis points to 2.66 percent.
- Germany’s 10-year bund yield was little changed at 0.36 percent.
Commodities
- West Texas Intermediate crude dropped 0.6 percent to $46.93 a barrel.
- Gold lost 0.2 percent to $1,319.37 an ounce after capping its best month since January.
- Gasoline for September advanced on Thursday for an eighth day, up 14 percent to $2.1399 a gallon. Earlier, the front-month contract touched the highest since July 2015. The October contract fell 0.6 percent to $1.7695 a gallon.
- Copper climbed 0.6 percent, heading for its eighth weekly gain.
