Asia Equities Mixed as US Shares Climb, Bonds Fall: Markets Wrap

Futures contracts for Hong Kong’s Hang Seng Index fell, indicating a third daily decline for the index, which has faced volatile trading this week as China attempts to stem the country’s equity market slump.

The Golden Dragon index of US-listed Chinese companies fell 1.1% in New York, indicating further pressure ahead in a day disrupted by holidays, including for Chinese New Year. Markets will close early Friday in Hong Kong and Singapore and will be shut in mainland China, Taiwan, South Korea, Indonesia, the Philippines and Vietnam.

Australian equities were little changed, while futures for Japan rose, supported by a weaker yen. The currency slipped 0.8% against the greenback on Thursday, in the wake of comments from a Bank of Japan deputy governor suggesting the central bank will be in no rush to shift its easy policy settings. An index of the dollar rose 0.2% Thursday.

The S&P 500 closed 0.1% higher, just below 5,000 index points — a threshold it hit during the session on Thursday. The closing level set a fresh high. The Nasdaq 100 rose 0.2%. US futures were little changed early Friday.

“Our base case remains for a soft landing for the US economy, with the S&P 500 ending the year around current levels,” Solita Marcelli at UBS Global Wealth Management said in a Thursday note. “However, recent economic data have highlighted the potential for a period of continued stronger growth, tame inflation, and swifter monetary easing. In this event, we believe the S&P 500 has the potential to rise to around 5,300 this year.”

Australia and New Zealand yields climbed Friday after Treasuries fell for a second day on Thursday. Selling came even the US government sold $25 billion in 30-year bonds at a lower-than-expected yield, in a sign of healthy demand.

The 10-year yield rose three basis points Thursday and has added 13 basis points this week as investors adjust interest rate forecasts on strong economic data and comments from Federal Reserve policymakers.

Federal Reserve Bank of Richmond President Thomas Barkin was the latest to reiterate the central bank has time to be patient before cutting rates. Fresh data on Thursday also underscored US economic resilience. Jobless claims fell just shy of consensus predictions, in a sign the labor market remains strong.

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Inflation Revisions

Interest rate forecasts could receive another jolt later Friday when the US revises monthly inflation data. Investors will be watching closely after last year’s revision cast doubt on the Fed’s progress in taming consumer prices.

“CPI revisions could throw cold water on the recent good inflation numbers — but this is a wonky number,” said Andrew Brenner at NatAlliance Securities. “We think the next move comes off the CPI number next Tuesday.”

Elsewhere, Treasury Secretary Janet Yellen said US regulators are monitoring risks stemming from nonbank mortgage lenders, and cautioned that a failure of one of them is possible in the case of market strains.

In Asia, Japan will release its money stock data for January, while new lending and money supply figures for China may be released as soon as today.

Bitcoin topped $45,000. Oil rallied amid doubts over a potential cease-fire in the Israel-Hamas war.

Read More: Asia Equities Mixed as US Shares Climb, Bonds Fall: Markets Wrap (yahoo.com)