(Bloomberg) — Asian stocks opened higher this week as focus shifted to a host of corporate earnings and economic indicators to gauge the direction of central bank policy.
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Indexes in Japan, Australia and South Korea all rose more than 1% early Monday, partially recovering from last week's slump. The dollar weakened slightly as traders took comfort that there was no further escalation by Iran following Israel's retaliatory strikes.
The rebound came after traders were spooked last week by tensions in the Middle East and hawkish comments from Federal Reserve officials indicating reluctance to cut interest rates anytime soon. U.S. growth and Fed-recommended inflation metrics are expected to be released this week, which will help determine when to cut interest rates. Investors will also have to digest a large amount of US Treasury auctions.
Another focus in the region on Monday was China's loan prime rates.
Win Hsin, global head of market strategy at Brown Brothers Harriman in New York, said the Fed is in a press blackout period, and “during this quiet period, markets often temper their expectations for the Fed.” Stated. “However, the Fed has been consistently sending hawkish messages in recent weeks, and markets would do well to remember that.”
Read more: Fed will cut rates and reset the clock with questions if interest rates are high enough
Last week was the S&P 500's worst week since March 2023, with the drawdown widening to more than 5% from its all-time high. After the index's strongest start to the year since 2019, investors are increasingly skeptical about how far the market will rise in the short term, even given the continued strength of the economy. It has become.
More than half of the Magnificent Seven tech giants are scheduled to report earnings this week, leaving investors wondering whether they can live up to the high expectations for artificial intelligence. The profits of the seven largest growth companies in the S&P 500 (Apple, Microsoft, Alphabet, Amazon.com, NVIDIA, Meta Platforms, and Tesla) were It is expected to increase by 38%. According to Bloomberg Intelligence, the first quarter. Excluding these, the benchmark index's remaining returns are expected to contract by 3.9%.
Meanwhile, conflicts continue to smolder in the Middle East and Ukraine. Ukrainian officials were delighted after the U.S. House of Representatives approved more than $60 billion in aid, with President Volodymyr Zelenskiy vowing the money would help the country regain the lead in the fight against Russian aggression.
According to RBC Capital Markets, Israel's limited strikes against Iran and the Iranian leadership's subdued response could provide an opportunity for the conflict between the long-term adversaries to wind down for some time.
Helima Croft, head of global commodity strategy at RBC, said: “Even if the worst-case scenario does not occur, this is far from an easy ceasefire and will be tested again as problems remain in the wider context of the Middle East. “Possible,” he wrote in a memo. To the client. “The last two weeks have shown that this war could suddenly escalate, that the opposing sides may not have a firm understanding of the lines the other has to cross, and that there is a risk that the dynamics of the war could slip into a fog. I showed you something.”
Oil fell after its first straight weekly decline this year as traders weighed possible next steps for Iran and Israel. Gold slipped.
Elsewhere this week, inflation figures for Australia and Malaysia are expected to be announced. Bank Indonesia's policy decision comes just as Caterpillar, a bellwether of global growth, is looking forward to earnings and the currency is under pressure.
This week's main events:
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China loan prime rate, Monday
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Eurozone consumer confidence, Monday
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Philippine and US militaries begin annual military exercises near Taiwan and the South China Sea on Monday
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ECB President Christine Lagarde speaks on Monday
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Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Tuesday
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UK S&P Global, CIPS Manufacturing PMI, Tuesday
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Australian CPI, Wednesday
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Indonesia interest rate decision Wednesday
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IBM, Boeing, Metaplatform earnings Wednesday
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Malaysia CPI, Thursday
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South Korea GDP, Thursday
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Turkey interest rate decision Thursday
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US GDP, wholesale inventories, new unemployment claims, Thursday
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Microsoft, Alphabet, Airbus, Caterpillar earnings results Thursday
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Japanese interest rate decision, Tokyo CPI, inflation and GDP forecast, Friday
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US Personal Income and Expenditures, University of Michigan Consumer Sentiment, Friday
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ExxonMobil, Chevron earnings, Friday
The main movements in the market are:
stock
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As of 7:58 a.m. Hong Kong time, S&P 500 futures were up 0.3%.
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Nasdaq 100 futures rose 0.4%
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S&P/ASX 200 futures rose 0.4%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0660.
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The Japanese yen remained almost unchanged at 154.60 yen to the dollar.
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The offshore yuan was little changed at 7.2513 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6423.
cryptocurrency
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Bitcoin rose 0.5% to $64,9966.2
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Ether rose 0.2% to $3,156.2
bond
merchandise
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West Texas Intermediate crude rose 0.1% to $83.26 per barrel.
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Spot gold fell 0.2% to $2,385.98 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Michael G. Wilson, Richard Henderson, and Tassia Sipahutar.
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