(Bloomberg) — Asian stocks are expected to fall early Monday as concerns grow about the health of the Chinese economy. U.S. stock futures were steady.
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Contracts in Australia, Hong Kong and mainland China are signaling early losses at the Monday open, while moves in Asia could be worsened by weak liquidity as Japanese markets are closed for a holiday. The S&P 500 closed 0.2% lower on Friday after quarterly options expiration.
Data released late Friday showed that China’s youth unemployment rate has soared to its highest level this year as the government cut spending and banks refused to cut lending rates. Adding to the weak sentiment, the U.S. is reportedly planning a rule that would ban Chinese hardware and software from being used in connected cars starting Monday.
“China is getting worse,” said Tony Sycamore, an analyst at IG in Sydney. “With Japanese stocks closed for a public holiday, the PBOC disappointing markets on Friday and US yields soaring, there is a good chance of a more bearish tone in Asian markets today.”
Overall, the market is gearing up for the final quarter after the Fed last week began its long-awaited rate-cutting cycle by lifting everything from Indonesian treasuries to gold. Data released this week, including the Fed’s preferred inflation measure, will determine whether the rally continues, and if it worsens, the odds of another 50 basis points cut will increase.
After swinging back and forth in the final minutes of Friday trading, the S&P 500 and Nasdaq 100 both fell, sending the broad benchmark to its 39th record high of 2024. The blue-chip Dow Jones Industrial Average closed at a new record. More than 20 billion shares traded on U.S. exchanges, the busiest session since January 2021.
Intel Corp. was one of the stocks that rose this session after reports of a proposed acquisition by Qualcomm Inc. The stock is likely to continue its gains in U.S. trading after reports that Apollo Global Management Inc. has proposed investing up to $5 billion in the chipmaker in the form of stock.
Gold topped $2,600 an ounce on Friday, extending gains after Israel attacked a Beirut suburb. Precious metals and oil were steady in early trading as Hezbollah launched retaliatory attacks on vast areas of northern Israel following the explosion of pagers and other electronic devices that killed at least 39 people in Lebanon last week.
The dollar was little changed against major currencies early Monday. US Treasurys were closed in cash in Asia due to a Japanese holiday. Australian bonds fell Tuesday as house prices supported sticky inflation as the central bank looked likely to extend its policy pause.
“The Australian economic team expects the RBA’s comments to be slightly less dovish than in August, which should help support the AUD,” Commonwealth Bank of Australia strategists including Joseph Capurso wrote in a note to clients. “It would take quite a bit for the RBA to cut the cash rate this year, and the risk is that it could be delayed until early 2025.”
Elsewhere this week, European factory activity and consumer confidence are due to be released, while Australia and Tokyo will report inflation data. A number of Fed speakers are expected as economic data, including the US personal consumption expenditures index and jobless claims, are released.
Key events this week:
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Malaysia CPI, Monday
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Eurozone HCOB Manufacturing PMI, HCOB Services PMI, Monday
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UK S&P Global Manufacturing PMI, S&P Global Services PMI, Monday
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Australian interest rate decision, Tuesday
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Japan Jibun Bank Manufacturing PMI, Services PMI, Tuesday
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Mexico CPI, Tuesday
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Bank of Canada Governor Tiff Macklem speaks on Tuesday.
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Australian CPI, Wednesday
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China’s medium-term lending system interest rate, Wednesday
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Swedish interest rate decision, Wednesday
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Swiss interest rate decision, Thursday
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ECB President Christine Lagarde speaks on Thursday
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U.S. unemployment claims, durable goods, revised GDP, Thursday
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Federal Reserve Chairman Jerome Powell delivers pre-recorded remarks at the 10th Annual U.S. Treasury Markets Conference on Thursday
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Mexico currency decision, Thursday
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Tokyo, Japan CPI, Friday
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Chinese industrial profits, Friday
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Eurozone consumer confidence, Friday
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U.S. PCE, University of Michigan Consumer Sentiment Index, Friday
Some of the key market moves:
stock
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As of 8:23 a.m. Tokyo time, S&P 500 futures were little changed.
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Hang Seng futures fell 0.5%.
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S&P/ASX 200 futures fell 0.8%.
call
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The Bloomberg Dollar Spot Index was little changed.
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The euro was little changed at $1.1163.
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The Japanese yen was little changed at 143.82 per dollar.
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The overseas yuan was virtually unchanged at 7.0442 per dollar.
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The Australian dollar was little changed at $0.6806.
Cryptocurrency
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Bitcoin rose 0.4% to $63,486.59.
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Ether rose 0.1% to $2,576.21.
Bonds
goods
This article was created with the assistance of Bloomberg Automation.
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