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(Bloomberg) -- Asian stocks closed in on a fourth month of gains, lifted by hopes of a soft landing for the US economy and the prospect of lower interest rates. Most Read from Bloomberg Shares in China led the advance, with sentiment boosted by a slew of upbeat earnings and a rebound in stocks of electric vehicle makers. Equities in Australia, Hong Kong and Japan rose, as did US futures, before publication of the Federal Reserve’s preferred inflation gauge later in the day.
Japan’s 10-year bond yield edged higher after data showed price pressures in Tokyo quickened in August, backing the case for a further normalization of monetary policy. The yen was on track to halt a two-day drop, while Treasuries were poised for a fourth straight monthly gain. Bets for a Fed rate cut continue to dominate global markets, after data showed that the central bank has managed to tame inflation without the economy tumbling into recession.
US output grew at a slightly stronger pace in the second quarter than initially reported, reflecting an upward revision to consumer spending that more than offset weaker activity in other categories. “The US economy looks like it’s moving from very strong to strong,” said Thomas Taw, BlackRock’s head of APAC investment strategy, told Bloomberg TV. “The data will continue to weaken, but you kind of have to marry that off with how much is inflation going to weaken in the US.
” The Bloomberg Dollar Spot Index was little changed, though gains earlier this week meant it is set to end up for the first week in five. Aside from the core PCE data due later in the session, the big focus for financial markets will be next week’s US employment data. Nonfarm payrolls figures on Sept.
6 will be scrutinized for clues as to whether the Fed will cut rates in September, after Chair Jerome Powell opened the door to easing at his Jackson Hole speech earlier this month. US interest rate cuts are likely to have knock-on effects for central banks across Asia, with analysts expecting authorities in Indonesia and India to lower borrowing costs. “The soothing Jackson Hole dovish messages continue to resonate, while focus turns to the US employment report to assess if a soft landing remains on track,” Barclays Plc analysts including Gabriel Casillas wrote in a note.
Meanwhile, shares of WuXi AppTec and WuXi Biologics are in focus as House Republican leaders plan votes early next month on a series of measures targeting Chinese companies. On the earnings front, Bank of China reported declines in first-half net income and commissions. In the commodities space, gold held near a record high and oil steadied after jumping on Thursday on positive US economic data and worsening supply disruptions in Libya.
Iron ore slipped after rallying by about 10% in 10 days to breach $100 a ton. Key events this week: Eurozone CPI, unemployment, Friday US personal income, spending, PCE; consumer sentiment, Friday Some of the main moves in markets: Stocks S&P 500 futures rose 0.2% as of 11:52 a.
m. Tokyo time Nikkei 225 futures (OSE) rose 0.7% Japan’s Topix rose 0.
6% Australia’s S&P/ASX 200 rose 0.4% Hong Kong’s Hang Seng rose 1.4% The Shanghai Composite rose 1.
1% Euro Stoxx 50 futures fell 0.1% Currencies The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1071 The Japanese yen rose 0.
2% to 144.76 per dollar The offshore yuan was little changed at 7.0906 per dollar Cryptocurrencies Bitcoin fell 0.
7% to $59,129.4 Ether fell 1.1% to $2,513.
29 Bonds The yield on 10-year Treasuries was little changed at 3.86% Australia’s 10-year yield advanced one basis point to 3.96% Commodities West Texas Intermediate crude rose 0.
1% to $75.99 a barrel Spot gold fell 0.2% to $2,516.
32 an ounce This story was produced with the assistance of Bloomberg Automation. --With assistance from Winnie Zhu. Most Read from Bloomberg Businessweek ©2024 Bloomberg L.
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