Stocks in Asia Set for Cautious Open, Crude Slides: Markets Wrap




  • In Business
  • 2022-08-15 23:10:21Z
  • By Bloomberg
 

(Bloomberg) -- Stocks in Asia look set for a cautious open on Tuesday as mounting signs of a sharp economic slowdown filter across global markets, supporting the dollar and bonds while depressing commodity prices.

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Futures pointed to muted starts for bourses in Japan, Australia and Hong Kong. US contracts were little changed after technology firms such as Tesla Inc. and Apple Inc. helped the S&P 500 index to close up on Monday.

US data signaled rapidly cooling manufacturing and slumping homebuilder sentiment, adding to economic risks after weak Chinese figures. Demand for havens lowered the US 10-year Treasury yield to 2.79% and spurred purchases of Australian debt.

Currencies including the offshore yuan and Australian dollar nursed losses, while the greenback held a jump. Oil sank below $89 a barrel on worries about demand as well as the possible return of Iranian supplies.

Global equities seem to be focused on the prospect of slower economic activity and ebbing commodity prices restraining high inflation and opening the way for less aggressive monetary tightening. The danger for the bounce from bear-market lows lies in the possibility of recession in a range of economies.

The market is still "breathing a little sigh of relief thinking the Fed is not going to be as aggressive in tightening," Margie Patel, senior portfolio manager at Allspring Global Investments LLC, said on Bloomberg Television. Many countries face the threat of recession but US fundamentals are better and the main risk is if the Federal Reserve slams on the brakes, she added.

US data showed a gauge of New York state manufacturing activity plunged by the second-most in figures going back to 2001. US homebuilder sentiment fell for an eighth-straight month, the worst stretch since the 2007 housing collapse.

Those reports followed an unexpected cut in interest rates by China on Monday ahead of figures showing the nation's economic slowdown deepened in July.

Here are some key events to watch this week:

  • Earnings include Walmart, Target, Home Depot, Tencent

  • Federal Reserve July minutes, Wednesday

  • New Zealand rate decision, Wednesday

  • UK CPI, US retail sales, Wednesday

  • Australia unemployment, Thursday

  • U.S. existing home sales, initial jobless claims, Conference Board leading index, Thursday

  • Fed's Esther George, Neel Kashkari speak at separate events, Thursday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.1% as of 7:51 a.m. in Tokyo. The S&P 500 rose 0.4%

  • Nasdaq 100 futures retreated 0.1%. The Nasdaq 100 rose 0.8%

  • Nikkei 225 futures were little changed

  • S&P/ASX 200 futures rose 0.3%

  • Hang Seng futures added 0.2%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was at $1.0165

  • The Japanese yen was at 133.13 per dollar, up 0.1%

  • The offshore yuan was at 6.8122 per dollar

Bonds

  • The yield on 10-year Treasuries declined four basis points to 2.79%

  • Australia's 10-year yield fell 11 basis points to 3.25%

Commodities

  • West Texas Intermediate crude fell 1.2% to $88.36 a barrel

  • Gold was at $1,778.85 an ounce

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©2022 Bloomberg L.P.

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