EghtesadOnline: Stocks rose and bonds stayed under pressure as Chinese data kept investors upbeat on the global economy following strong U.S. hiring figures.
Equities climbed from Sydney to Hong Kong, and U.S. and U.K. index futures also advanced. Chinese shares were lower even though producer prices showed robust demand in Asia’s largest economy. The yen was near a two-month low as investors assessed the latest poor approval ratings for Japan’s Prime Minister Shinzo Abe, while Bank of Japan Governor Haruhiko Kuroda said the economy was turning toward moderate expansion and reiterated that policy could be adjusted as needed. Oil rose, according to Bloomberg.
With global stocks close to all-time highs, investors are shrugging off political uncertainty and placing their faith in a continued earnings expansion on broadening global growth. U.S. employers added the most jobs in four months in June, though wage increases were sluggish, according to data Friday.
“The weaker wage growth buys the Fed more time to wait for inflation signals to pick up before increasing rates which supports the current market view of balance sheet announcement in September followed by a rate hike in December,” Stephen Innes, senior trader at Oanda Corp., wrote in a note Monday. “Ultimately the Goldilocks NFP is a win-win for the US dollar and global equities.”
The Group-of-20 summit made little headway on dominant foreign policy issues such as North Korea’s escalation of tensions. Meetings between U.S. President Donald Trump and the leaders of South Korea, Japan and China ended without a clear consensus about how to curb North Korea’s nuclear ambitions.
Here’s what investors will be watching:
- Federal Reserve Chair Janet Yellen’s testimony before Congress will be in focus later this week as investors look for guidance of when the U.S. central bank could start reducing its balance sheet. Other Fed speakers include Lael Brainard, while there’s plenty of data releases. Retail sales, industrial output and business inventories may sway GDP forecasts and CPI could signal if disinflation is intensifying.
These are the main moves in markets:
- The yen fell 0.2 percent to 114.13 per dollar as of 1:17 p.m. in Tokyo.
- The Bloomberg Dollar Spot Index was little changed, as were the euro and pound. The Canadian dollar was down 0.1 percent after its 0.8 percent jump Friday.
- The Korean won was up 0.4 percent at 1,149.80 per dollar, while the Indian rupee gained 0.1 percent to 64.52. The Mexican peso climed 0.5 percent to 18.01 versus the greenback.
- S&P 500 Index futures were up 0.2 percent and FTSE 100 futures rose 0.5 percent.
- The MSCI Asia Pacific Index rose 0.5 percent, the most since June 29, after hitting a five-week low Friday.
- Japan’s Topix Index added 0.6 percent. Australia’s S&P/ASX 200 Index gained 0.3 percent, as did South Korea’s Kospi Index. Hong Kong’s Hang Seng Index rose 1.1 percent, its biggest gain this month.
- The Shanghai Composite Index lost 0.2 percent. China’s producer price index rose 5.5 percent on-year in June and the consumer price index was up 1.5 percent, the same as in May and in largely line with expectations.
- The yield on 10-year Treasuries was steady at 2.39 percent after rising 24 basis points in the past two weeks. The yield on 10-year Australian government bonds rose one basis point to 2.75 percent.
- WTI crude climbed 0.8 percent to $44.57 a barrel following its 2.8 percent slide Friday.
- Gold was down 0.1 percent at $1,211.13 an ounce.