(Bloomberg) — Shares in Asia opened lower after Wall Street saw a late-day rebound in trading, helping the S&P 500 notch one of its biggest November rallies on record. Treasuries were steady.
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Equities in Japan were mixed while those in Australia and South Korea fell. A gauge of Asian shares retreated. The S&P 500 climbed 0.4% Thursday, capping one of its best November returns in the past century. US futures pointed slightly lower early Friday.
Focus in Asia is on China’s Caixin PMI, which will give a read on the health of its economy after weak manufacturing data released Thursday deepened worries over the recovery. Korean exports — seen a bellwether for global trade due to its early release — rose more than expected in November, though it failed to boost risk sentiment amid other headwinds.
The 9.1% November gain for the MSCI All Country World Index was the third largest monthly gain in the past decade. The equity rally was helped along by speculation the Federal Reserve’s rate-hike cycle has peaked, an idea hinted at by central bank officials through the week.
“Almost everyone was offsides coming into November,” said Ryan Detrick, chief market strategist at Carson Group. “So there’s still a big opportunity for traders to chase gains in December, too.”
Those signals presage comments from Fed Chair Jerome Powell, who will speak later Friday, in a discussion that may offer more clues.
“It is still too early to eliminate the tightening bias in the Fed’s forward guidance,” said Brian Rose, senior US economist at UBS Global Wealth Management. “Fed Chair Jerome Powell will make a public appearance on Friday, and we expect him to be careful to avoid sounding too dovish.”
Data has also helped. The US core personal consumption expenditures price index, the Fed’s preferred gauge of underlying inflation, fell, indicating easing price pressures in line with economists’ estimates. That followed evidence from the labor market and consumer spending indicating growth is gradually slowing.
“We’ve seen continuous evidence that inflation is in fact falling quickly — it’s kind of collapsing right now,” said Scott Ladner, chief investment officer for Horizon Investments, speaking on Bloomberg Television. “I think the Fed will continue to be on hold in December.”
November Gains
Treasuries were steady Friday after slipping Thursday, adding seven basis points to the 10-year yield. That did little to pull back November gains for bonds — both government and corporate — after a jump in the past few weeks. Australian and New Zealand bond yields gained in Asia.
The dollar edged lower Friday, snapping two days of gains and following its worst month in a year. The Korean won also fell, while the yen strengthened against the greenback. However, prolonged weakness in the Japanese currency was a driver of life insurers cutting currency hedging by the most in more than a decade.
Gold rose after a decline in the prior session. Bitcoin was little changed at around $37,600. Crude prices fell even as the OPEC+ group of petroleum producing nations agreed to a supply cutback of about 900,000 barrels a day, in a sign traders are skeptical it will be implemented.
Elsewhere in Asia, PMI data for India and Taiwan are set for release, as are the latest inflation reports for Indonesia and Pakistan.
Corporate highlights include Tesla Inc. launching its Cybertruck model after two years of delays. Dell Technologies Inc, meanwhile, reported revenue that declined more than expected, buffeted by continued sluggish corporate demand for personal computers.
Key events this week:
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China Caixin Manufacturing PMI, Friday
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Eurozone S&P Global Manufacturing PMI, Friday
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US construction spending, ISM Manufacturing, Friday
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Fed Chair Jerome Powell to participate in “fireside chat” in Atlanta, Friday
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Chicago Fed President Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.1% as of 9:21 a.m. Tokyo time. The S&P 500 rose 0.4% on Friday
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Nasdaq 100 futures fell 0.2%. The Nasdaq 100 fell 0.3%
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Japan’s Topix rose 0.2%
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Australia’s S&P/ASX 200 fell 0.5%
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Euro Stoxx 50 futures rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0898
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The Japanese yen rose 0.2% to 147.86 per dollar
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The offshore yuan was little changed at 7.1420 per dollar
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The Australian dollar rose 0.1% to $0.6612
Cryptocurrencies
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Bitcoin fell 0.3% to $37,648.5
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Ether rose 0.1% to $2,049.07
Bonds
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The yield on 10-year Treasuries declined two basis points to 4.31%
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Japan’s 10-year yield advanced three basis points to 0.690%
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Australia’s 10-year yield advanced five basis points to 4.46%
Commodities
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West Texas Intermediate crude fell 0.3% to $75.76 a barrel
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Spot gold rose 0.3% to $2,041.93 an ounce
This story was produced with the assistance of Bloomberg Automation.
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