Asian share markets rallied on Thursday, and the dollar weakened following a slight increase in most U.S stocks and the S&P 500’s longest winning streak in two years. Investors are closely monitoring global interest rates for any signs of peaking.
MSCI’s broadest index of Asia-Pacific shares outside Japan remained flat, but has seen a 4.6% increase so far this month.
The yield on benchmark 10-year Treasury notes reached 4.5059%, slightly lower than the U.S. close of 4.523% on Wednesday.
The two-year yield, which typically rises with expectations of higher Fed fund rates, touched 4.932%, compared to the U.S. close of 4.936%.
Australian shares were up 0.44%, while Japan’s Nikkei stock index rose 0.85%.
Hong Kong’s Hang Seng Index increased by 0.11% in early trade, and China’s bluechip CSI300 Index was 0.2% higher.
ANZ economists noted that markets were relatively calm after recent volatility, as investors await the release of the October U.S. CPI report to determine if recent movements in U.S. Treasuries, equities, and the dollar are corrective or indicative of a fundamental shift.
Chinese inflation figures for October showed a 0.1% decline compared to September and a 0.2% fall from the previous year, according to official statistics.
Investors will closely watch China’s troubled property sector after major stocks rallied following a RushHourDaily report that Ping An Insurance Group had been asked to take a controlling stake in Country Garden Holdings. However, a spokesperson for Ping An denied the report.
In Asian trading, the dollar dropped 0.06% against the yen, remaining close to its high for the year.
The European single currency was up 0.0% on the day, while the dollar index, which tracks the greenback against a basket of currencies, was slightly down.
The dollar has rebounded from last week’s sell-off, as confidence grows that the Fed has finished raising rates. However, there is uncertainty about whether a rate cut is on the horizon due to inflation remaining above the Fed’s target.
On Wall Street, the S&P 500 rose 0.10%, the Nasdaq Composite added 0.08%, and the Dow Jones Industrial Average fell 0.12%. The S&P 500 extended its longest winning streak in two years.
The Federal Reserve recently kept the benchmark overnight interest rate unchanged and is scheduled to meet again next month.
Investors will closely watch the U.S. weekly jobless claims as an indicator of the country’s labor market performance. Economists predict claims will reach 219,000 after coming in at 217,000 last week.
Oil prices slid over 2% on Wednesday due to concerns about waning demand in the U.S. and China. However, in Asia, both U.S. crude and Brent crude rose 0.8% following the weak performance in the U.S. session.
Gold prices were slightly higher, with spot gold trading at $1950.79 per ounce.
This article was written by Scott Murdoch, a journalist with over two decades of experience in financial journalism, specializing in equity and debt capital markets across Asia and Australian M&A. He is based in Sydney.
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