Equity futures in Asia were mixed following further gains for US stocks, while Treasuries pulled back as investors gauged fresh signs of resilience in the world’s largest economy.
Contracts for share benchmarks in Japan and Australia were slightly lower, while those for Hong Kong edged higher. The S&P 500 gained 0.2%, helped along by favorable corporate earnings and bets Federal Reserve tightening has reached the peak.
Australian and New Zealand yields edged higher after Treasuries pared gains from the earlier in the week. The 10-year yield rose nine basis points to above 4.5% on Wednesday. That helped the greenback, which gained ground against major currencies, including the yen, which weakened beyond 151 per dollar.
The nascent calm was reflected in the VIX index, Wall Street’s fear gauge, which sat near its two-month low. The ICE BofA MOVE index that charts bond market volatility also eased lower.
Those moves followed fresh data that helped build the case for a soft landing. Retail sales slowed in October and prior months were revised higher — suggesting some resiliency going into the holiday season. Prices paid to US producers unexpectedly declined by the most since April 2020.
“We got more Goldilocks today,” said David Russell, global head of market strategy at TradeStation. “Price growth is moderating, but with strong demand on the sidelines. The soft landing is taking shape.”
Despite the growing hopes US inflation will further dissipate toward the Fed’s 2% target, a growing number of high-profile Wall Street figures have urged caution.
The bond market is at risk of leaning too heavily toward rate cuts next year as “the inflation problem is far from being solved,” according to Daniel Ivascyn, chief investment officer at Pacific Investment Management Co. He joined Jamie Dimon, chief executive officer of JPMorgan Chase & Co. and Ken Griffin, founder of Citadel, who have both this week warned inflation may be more persistent than markets are pricing.
In Asia, Australian inflation expectations and jobs data is due. In Japan, trade figures will be released while China new home prices are also expected later today. That follows reports earlier in the week showing resilient Chinese consumer spending, and also a plan to support the property sector that buoyed developers on Wednesday.
Investors will also be focused on Tencent Holdings Ltd. following its better-than-expected profit report late Wednesday.
Elsewhere, oil fell after a government report showed swelling US crude inventories. Gold was steady and Bitcoin traded above $37,500.
Key events this week:
- China new home prices, Thursday
- US initial jobless claims, industrial production, Thursday
- Walmart earnings, Thursday
- Cleveland Fed President Loretta Mester, New York Fed President John Williams and Fed vice chair for supervision Michael Barr speak, Thursday
- Bank of England deputy governor Dave Ramsden and ECB President Christine Lagarde speak at event, Thursday
- US housing starts, Friday
- US Congress faces a midnight deadline to pass a federal spending measure, Friday
- ECB President Christine Lagarde speaks, Friday
- Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins and San Francisco Fed President Mary Daly speak, Friday
Some of the main moves in markets:
Stocks
- Nikkei 225 futures fell 0.2% as of 7:48 a.m. Tokyo time
- Hang Seng futures rose 0.9%
- S&P/ASX 200 futures fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro was unchanged at $1.0848
- The Japanese yen was little changed at 151.30 per dollar
- The offshore yuan was little changed at 7.2584 per dollar
- The Australian dollar was little changed at $0.6508
Cryptocurrencies
- Bitcoin rose 0.4% to $37,787.56
- Ether rose 0.5% to $2,057.56
Bonds
- Australia’s 10-year yield advanced seven basis points to 4.60%
Commodities
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.