(Bloomberg) — Asian stocks may struggle in early trading after disappointing Chinese economic measures and the release of anemic inflation data over the weekend. Bitcoin surpassed $81,000 after President-elect Donald Trump swept all seven US battleground states.
Bloomberg’s Most Read
Australian shares fell while futures in Tokyo and Hong Kong pointed to losses after China’s 10 trillion yuan ($1.4 trillion) plan to help local governments deal with hidden debt fell short. include new measures to boost domestic demand. U.S. contracts rose after the S&P 500 rose 0.4% on Friday to cap stocks’ best week this year in anticipation of Trump’s pro-growth agenda.
A softer start is expected in Asia after the region’s stocks rose 2.4% last week amid improving sentiment following the Federal Reserve’s rate cut and hopes of more stimulus in China. Investors are now shifting to assess how quickly Trump will implement his protectionist tax and trade policies, including proposed tariffs on China.
“The market’s next move will depend on whether Trump prioritizes cutting taxes or raising tariffs, each with a very different impact,” Tony Sycamore, an analyst at IG Markets in Sydney, wrote in a note. “This clarification may still be months away and it’s worth remembering that in 2016, Trump’s first move was to cut taxes, which sent stock markets higher before tariffs on China caused headwinds.”
Bitcoin surpassed $81,000 for the first time in early Asia, after hitting a record high of $80,000 on Sunday, boosted by the incoming president’s support for digital assets and the election of pro-crypto lawmakers.
Meanwhile, sentiment toward China is faltering as foreign direct investment falls amid geopolitical tensions, competition from domestic industries and concerns about the nation’s economic prospects. Consumer inflation approached zero in October, suggesting the latest round of government stimulus is far from enough to free the economy from the grip of deflation.
“Many feel China is keeping its tactical power in play as Trump-China tariff negotiations unfold, and may respond in a more targeted way to curb the likely economic fallout,” said Chris Weston, head of research at Pepperstone Group. in Melbourne he wrote in a note. “In the near term, however, it suggests downside risk to China/Hong Kong stocks and the yuan.”
The dollar rose against its major peers in early Asian trading, extending last week’s gain amid concerns that Trump’s fiscal policies will stoke inflation. While the US Treasury yield curve flattened on Friday, companies including BlackRock, JPMorgan Chase and TCW Group warn that the sell-off in the bond market is likely far from over. Cash Treasury bonds are closed on Mondays due to a holiday.
Federal Reserve Bank of Minneapolis President Neel Kashkari indicated over the weekend that the central bank may cut rates less than previously expected amid a strong U.S. economy. Kashkari emphasized, however, that it is too early to determine the impact of Trump’s policies.
Oil was little changed near $70 a barrel in early Asian trading after falling 2.7% on Friday amid disappointment over China’s stimulus measures. Gold remained stable.
This week, traders will analyze data ranging from Australian employment to China’s retail sales and industrial production, US and eurozone inflation, as well as growth readings in the UK and Japan. Several Federal Reserve officials are scheduled to speak, which may help indicate the central bank’s thinking following the election result.
This week’s key events:
Japan current account, Monday
Denmark CPI, Monday
Norway CPI, Monday
The United Nations climate change conference, COP29, begins on Monday
Germany CPI, Tuesday
UK jobless claims, unemployment, Tuesday
Fed speakers including Christopher Waller on Tuesday
Japan IPP, Wednesday
Eurozone industrial production, Wednesday
US CPI, Wednesday
Unemployment in Australia, Thursday
Eurozone GDP, Thursday
US PPI, jobless claims, Thursday
Reserve Bank of Australia Governor Michele Bullock speaks on Thursday
Federal Reserve Chairman Jerome Powell speaks Thursday
ECB President Christine Lagarde speaks on Thursday
BOE Governor Andrew Bailey speaks Thursday
Japan GDP, industrial production, Friday
China retail sales, industrial production and fixed asset investment, Friday
UK GDP, industrial production, trade balance, Friday
US Retail Sales, Friday
Alibaba earnings, Friday
Some of the main movements in the markets:
Stocks
S&P 500 futures were up 0.2% at 8:25 a.m. Tokyo time
Nikkei 225 futures fell 0.9%
Hang Seng futures fell 1.6%
Australia’s S&P/ASX 200 fell 0.3%
Coins
The euro was little changed at $1.0712
The Japanese yen fell 0.2% to 152.89 per dollar
The offshore yuan was little changed at 7.1980 per dollar.
The Australian dollar was little changed at $0.6581.
Cryptocurrencies
Bitcoin rose 0.6% to $80,386.76
Ether rose 0.4% to $3,184.06.
Captivity
Raw materials
This story was produced with the help of Bloomberg Automation.
(Fixes incorrect currency conversion in second paragraph.)
