(Bloomberg) — Asian stocks traded in a narrow range on Monday as investors assessed a raft of data that reinforced concerns about the health of China’s economy.
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South Korean stocks gained ground, while Australian stocks fell and futures pointed to a lower start in Hong Kong. Cash trading in U.S. Treasuries was closed in Asia due to a holiday in Japan. The yen fell after Bank of Japan Governor Kazuo Ueda indicated on Friday that authorities are in no hurry to raise interest rates again.
China’s economy is showing few signs of recovery. Last week, data showed governments cut spending, while the youth unemployment rate rose to its highest level this year as the country’s banks refrained from cutting interest rates. Compounding the weak sentiment, the United States is said to be planning to implement rules that would ban Chinese hardware and software for connected vehicles from Monday.
“The situation in China is going from bad to worse,” said Tony Sycamore, an analyst at IG in Sydney. “With Japanese stock markets closed for a public holiday, the People’s Bank of China disappointing the market on Friday and US yields rising, we are likely to see a more bearish tone in Asian stock markets today.”
The dollar was little changed against its Group of 10 peers on Monday morning. Australian bonds fell ahead of a likely extension of the central bank’s pause in monetary policy on Tuesday as rising housing costs underpin persistent inflation.
Broadly speaking, markets are gearing up for the final quarter after the Federal Reserve kicked off its long-awaited rate-cutting cycle last week, lifting everything from Indonesian bonds to gold. Data this week, including the Fed’s preferred inflation measure, should confirm whether the rally will extend, with a deterioration likely to raise the chances of a further 50-basis-point cut.
Brent crude rose, with attention focused on the escalating conflict between Israel and Hezbollah. Gold steadied near a record.
In Asia, Sri Lankans over the weekend elected a leftist politician as president who promised to reopen negotiations with the International Monetary Fund over their $3 billion bailout, which included spending cuts and tax increases.
Elsewhere in Europe, data on factory activity and consumer confidence are due this week, while Australia and Tokyo are due to publish inflation data. Several Federal Reserve speakers are also expected as economic data including the US personal consumption expenditures indicator and jobless claims are due to be released.
Key events of 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 and S&P Global Services PMI, Monday
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Australian rate decision on Tuesday
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Jibun Bank of Japan Manufacturing PMI and Services PMI, Tuesday
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Mexico CPI, Tuesday
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Bank of Canada Governor Tiff Macklem speaks Tuesday
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Australian CPI, Wednesday
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China’s medium-term lending facility interest rate, Wednesday
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Swedish interest rate decision on Wednesday
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Swiss interest rate decision on Thursday
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ECB President Christine Lagarde speaks on Thursday
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U.S. jobless claims, durable goods and revised GDP, Thursday
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Federal Reserve Chairman Jerome Powell delivers pre-recorded remarks at the 10th annual U.S. Treasury market conference on Thursday
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Mexico’s interest rate decision, Thursday
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Tokyo CPI, Japan, Friday
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China industrial profits, Friday
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Eurozone consumer confidence, Friday
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US PCE, University of Michigan Consumer Sentiment, Friday
Some of the main movements in the markets:
Stocks
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S&P 500 futures were up 0.1% as of 9:04 a.m. Tokyo time.
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Hang Seng futures fell 0.5%
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Australia’s S&P/ASX 200 index fell 0.4%
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Euro Stoxx 50 futures fell 1.4%
Coins
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Bloomberg Dollar Spot Index little changed
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The euro remained virtually unchanged at $1.1160.
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The Japanese yen fell 0.2 percent to 144.11 per dollar.
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The offshore yuan was unchanged at 7.0464 per dollar.
Cryptocurrencies
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Bitcoin rose 0.4% to $63,461.17
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Ether rose 0.2% to $2,578.54
Captivity
Raw materials
This story was produced with assistance from Bloomberg Automation.
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