← Go back Jul 07, 2023
(Bloomberg) -- Asian stocks were under pressure Tuesday after equities on Wall Street scratched out marginal gains ahead of the Independence Day holiday. (Bloomberg) -- Asian stocks were under pressure Tuesday after equities on Wall Street scratched out marginal gains ahead of the Independence Day holiday. Japan’s benchmark indexes fell, as did those those for Hong Kong and South Korea. Australian equities were flat ahead of an interest-rate decision. This follows an advance of just 0.1% for the S&P 500 in a shortened session Monday that ended at lunchtime. The Nasdaq 100 added 0.2% on a day that brought data showing a slowdown in manufacturing. US equity futures were marginally lower in Asian trading while currencies steadied. The offshore yuan strengthened slightly after the People’s Bank of China extended again its efforts to stabilize the currency by setting the daily reference rate at a stronger-than-expected level. The yen edged higher. Economists and traders are divided on likelihood of a rate hike or pause by the Reserve Bank of Australia Tuesday. The Aussie advanced after modest increases over the past three days. Yields on the nation’s policy-sensitive three-year government bonds rose four basis points to about 4%. “We know that the terminal peak pricing by December is another 50 basis points including potentially one today,” Chris Weston, head of research at Pepperstone Group, said on Bloomberg Television. “But if there’s anything that suggests that 50 basis points of additional hike is mispriced, this narrow path that the RBA needs to kind of thread policy through will be called into question. That’s where equities and certainly bank equities could come under pressure.” Traders will also be looking for any market fallout from China’s escalation of the tit-for-tat technology trade conflict with the US and its allies. China is imposing restrictions on exports of gallium and germanium, which are crucial for for semiconductor, telecommunications and electric vehicles. Meanwhile, a key part of the US Treasury yield curve approached its most inverted level in decades on Monday as traders priced in further hikes from the Federal Reserve. Two-year yields exceeded the 10-year by around 111 basis points. The Treasury market is shut Tuesday for Independence Day. Cooling signals in the world’s biggest economy — which are set to influence the trajectory of the Fed’s monetary-tightening cycle — mean investors are tempering expectations for stocks for the remainder of the year, especially as central banks worldwide have maintained their hawkish rhetoric. The manufacturing sector painted a grim picture as US factory activity fell to its weakest level in more than three years. Production and new orders data also suggested a pullback. Elsewhere, oil rose modestly as traders assessed the latest salvo from OPEC+ kingpins Saudi Arabia and Russia to prop up prices by curbing supply. Gold was little changed. WATCH: Audrey Goh of Standard Chartered Wealth Management Group discusses equities, bonds, and policies of central banks including the Fed.Source: Bloomberg Key events this week: Australia interest rate decision, Tuesday US Independence Day national holiday. Financial markets closed, Tuesday China Caixin services and composite PMI, Wednesday Eurozone S&P Global Eurozone services PMI, PPI, Wednesday OPEC International Seminar, speakers including OPEC+ oil ministers, kicks off in Vienna, Wednesday FOMC issues minutes on June policy meeting, Wednesday New York Fed President John Williams in “fireside chat” at meeting of the Central Bank Research Association at the New York Fed, Wednesday US initial jobless claims, trade, ISM services, job openings, Thursday Dallas Fed President Lorie Logan speaks on a panel about the policy challenges for central banks at CEBRA meeting, Thursday US unemployment rate, nonfarm payrolls, Friday ECB’s Christine Lagarde addresses an event in France, Friday Some of the main moves in markets today: Stocks S&P 500 futures were little changed as of 10:22 a.m. Tokyo time. The S&P 500 rose 0.1% Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 0.2% Japan’s Topix fell 0.6% Hong Kong’s Hang Seng Index fell 0.1% Australia’s S&P/ASX 200 Index was little changed Currencies The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.0915 The Japanese yen rose 0.2% to 144.45 per dollar The offshore yuan rose 0.2% to 7.2395 per dollar The Australian dollar rose 0.1% to $0.6682 Cryptocurrencies Bitcoin was little changed at $31,158.73 Ether fell 0.1% to $1,956.77 Bonds Japan’s 10-year yield was unchanged at 0.400% Australia’s 10-year yield advanced three basis points to 4.00% Commodities West Texas Intermediate crude rose 0.4% to $70.08 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation. --With assistance from Jason Scott. More stories like this are available on bloomberg.com ©2023 Bloomberg L.P.
Read more: bloombergquint
