(Bloomberg) — Asian stocks fell this week as traders awaited policy decisions from major central banks as concerns about a political crisis in France stoked jitters in global markets.
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Stock benchmarks in Japan and South Korea fell, while those in Australia fluctuated. Benchmark 10-year Treasury notes fell and U.S. stock futures were little changed. Markets including Singapore, India and Indonesia are closed for the holiday.
The flight into haven assets came as risk sentiment worsened, with global stock indices falling the most in two weeks as fallout from France’s snap parliamentary election threatened to spread to the rest of the European Union. The dollar rose slightly, trading near its highest level since November. The euro stabilized after its biggest decline in two months last week. French bond futures were lower in early Asian trading. Last week, the spread between French and German bonds widened to a record high.
“Investor uncertainty about the ballot box is reemerging. The last two weeks have highlighted the risk of volatility despite expectations of a change of government, starting with South Africa, moving on to Mexico and now throwing Europe into the dust with the surprise French election. said Bob Savage. , is head of market strategy and insights at BNY Mellon. “Concerns are growing about the risk of early elections next month, with government support weakening in opinion polls in Japan and Germany.”
The People’s Bank of China is expected to infuse some additional cash on Monday when it rolls over medium-term lenders, but most economists expect it to keep its funds rate unchanged at 2.5%. The decision comes ahead of key data on industrial production, retail sales, home prices and real estate investment as policymakers implement measures to prop up the real estate market.
Tony Sycamore, market analyst at IG Australia Pty, said: “The market will be paying particular attention to house price data and will be looking for evidence that the government’s recent efforts to stabilize the downturn in the property market are working after 10 consecutive months of falling house prices. “It is,” he said. , wrote in the note.
political risk
A coalition of French left-wing parties has presented a manifesto that undoes most of Macron’s seven years of economic reforms and puts France on a collision course with the European Union over fiscal policy. Far-right leader Marine Le Pen said she would not try to oust President Emmanuel Macron in France’s snap election as she appealed to moderates and investors.
Days after the Federal Reserve scaled back its outlook for US monetary easing this year, policymakers from Britain to Australia are likely to signal this week that they are not yet confident enough in eliminating inflation to start lowering borrowing costs. Emerging market policymakers, including Indonesia and Brazil, are also likely to delay interest rate cut expectations.
Minneapolis Federal Reserve President Neel Kashkari said over the weekend that the central bank may take its time and watch data come in before starting to cut interest rates, a move that Cleveland Fed’s Loretta Mae still sees as inflation risks tilted to the upside. I agree with President Steer’s sentiments.
U.S. stocks struggled to gain gains on Friday after a consumer sentiment index fell to a seven-month low as high prices continued to take a toll on personal finances. The S&P 500 closed slightly lower due to declines in industrial stocks. The technology sector led, with Adobe Inc. up 15% on a strong outlook. The Stoxx Europe 600 fell 1%, while France’s CAC 40 index extended losses by more than 6% last week, its highest since March 2022.
This week, traders will be watching inflation figures from Europe and the UK to help them make a detailed assessment of the outlook for global monetary policy. Meanwhile, Fed officials including Dallas Fed President Rory Logan, Chicago Fed President Austan Goolsbee, and Fed President Adriana Kugler are scheduled to give speeches.
In commodities, oil prices posted their biggest weekly gain since early April as traders awaited Chinese trade data that will provide a snapshot of the economic strength of the world’s biggest crude importer.
Key events this week:
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Chinese real estate prices, retail sales, industrial production, unemployment rate, Monday
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Philippine overseas remittance, Monday
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Italian CPI, Monday
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US Imperial Manufacturing, Monday
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ECB Chief Economist Phillip Lane speaks on Monday.
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Philadelphia Federal Reserve President Patrick Harker speaks Monday.
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Australian interest rate decision, Tuesday
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Chile interest rate decision, Tuesday
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Eurozone CPI, Tuesday
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Singapore Trade, Tuesday
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U.S. retail sales, corporate inventories, industrial production, cross-border investment, Tuesday
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Richmond Fed President Thomas Barkin, Dallas Fed President Rory Logan, Fed President Adriana Kugler, St. Louis Fed President Alberto Musallem, and Chicago Fed President Austan Goolsbee.
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Japan Trade, Wednesday
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Bank of Japan releases minutes of April policy meeting on Wednesday
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South Africa CPI, Retail Sales, Wednesday
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UK CPI, Wednesday
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Bank of Canada releases summary of deliberations Wednesday
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Brazil interest rate decision, Wednesday
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New Zealand GDP, Thursday
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China loan preferential rates, Thursday
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Indonesia interest rate decision, Thursday
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Eurozone consumer confidence, Thursday
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Norwegian interest rate decision, Thursday
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Swiss interest rate decision, Thursday
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Euro zone finance ministers meeting on Thursday
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UK BOE interest rate decision, Thursday
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U.S. housing starts, first unemployment claims, Thursday
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Japan CPI, Friday
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Hong Kong CPI, Friday
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India S&P Global Manufacturing PMI, Friday
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Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Friday
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UK S&P Global/CIPS Manufacturing PMI, Friday
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U.S. Existing Home Sales, Conf. Board Leading Index, Friday
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Canadian Retail Sales, Friday
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Richmond Federal Reserve President Thomas Barkin speaks Friday.
The main movements in the market are:
stock
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S&P 500 futures were little changed as of 9:47 a.m. Tokyo time.
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Hang Seng futures fell 0.7%.
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Nikkei 225 futures (OSE) fell 2%.
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Japanese Topix fell 1.6%
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Australia’s S&P/ASX 200 index was little changed
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Euro STOXX 50 futures rise 0.2%
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Nasdaq 100 futures little changed
call
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The Bloomberg Dollar Spot Index was little changed.
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The euro was little changed at $1.0706.
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The Japanese yen was little changed at 157.37 per dollar.
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The offshore yuan was little changed at 7.2708 per dollar.
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The Australian dollar was little changed at $0.6617.
cryptocurrency
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Bitcoin rose 0.4% to $66,738.55.
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Ethereum rose 1% to $3,634.08.
bond
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The 10-year Treasury yield rose 2 basis points to 4.24%.
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Japan’s 10-year government bond yield fell 1 basis point to 0.925%.
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Australian 10-year yields fell 2 basis points to 4.10%.
necessity
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West Texas Intermediate crude fell 0.2% to $78.33 per barrel.
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Spot gold fell 0.3% to $2,327.02 per ounce.
This article was produced with help from Bloomberg Automation.
–With assistance from Michael G. Wilson and Masaki Kondo.
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