Asia Stocks Trim Gains on China Slowdown Concerns: Markets Wrap

(Bloomberg) — Asian stocks pared gains as concern China’s economy is slowing weighed on tech shares. Equities were still higher across the region as a whole on optimism a report Tuesday will show US inflation slowed last month.

Most Read from Bloomberg

MSCI’s gauge of regional equities trimmed its advance to 0.3% from as much as much as 0.7%. China is scheduled to publish a range of economic data Wednesday including retail sales, industrial production and fixed-asset investment. Tech giants Tencent Holdings Ltd. is also due to announce earnings Wednesday and Alibaba Group Holdings Ltd. on Thursday.

“Sentiment is quite fragile and that means the market’s probably not going to move on valuation alone,” said Julia Wang, a global market strategist at JPMorgan Private Bank, speaking on Bloomberg Television. “It needs other catalysts and some of that catalysts have to come from a clearing of the policy uncertainty when it comes to being more pro-business.”

US inflation probably slowed to an annual rate of 3.3% in October from 3.7% in September, according to a Bloomberg survey of economists. If inflation does ease, that may help cement the notion that global interest rates are peaking.

Federal Reserve Vice Chair Philip Jefferson and Chicago Fed President Austan Goolsbee may deliver further clues on the rate path when they speak at separate events Tuesday. UK jobless claims are also due.

“Markets are sidelined today as the market waits for the US CPI print,” said Eugenia Victorino, head of Asia strategy at Skandinaviska Enskilda Banken AB in Singapore. “Positioning is very light. An upside surprise on the core inflation (specifically the core-ex-rents) could trigger more hawkish rhetoric from the Fed.”

Treasuries were little changed in Asia, with two-year yields hovering just around 5.04%. The dollar traded in a narrow range against its major peers.

Chinese President Xi Jinping and his US counterpart Joe Biden are due to meet Wednesday on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco, and there’s some optimism their discussion will help ease tensions between the two economic giants.

Oil climbed for a fourth day, the longest run of gains in more than two months, on signs the demand outlook may not be as bad as previously feared. Gold was little changed after rising on Monday.

Walmart Inc. and Target Corp. will provide insights into how much consumers have reined in discretionary spending when they report earnings this week, including a glimpse into shopping patterns ahead of the vital holiday season. Home Depot Inc. is reporting Tuesday.

Wall Street is also keeping a close eye on Washington negotiations to avert a US government shutdown at the end of this week, an event that would threaten the loss of the nation’s last top credit rating after Moody’s Investors Service signaled Friday it was inclined to issue a downgrade amid wider budget deficits and political polarization.

Key events this week:

• Germany ZEW survey expectations, Tuesday

• UK jobless claims, Tuesday

• US CPI, Tuesday

• Home Depot earnings, Tuesday

• Fed Vice Chair Philip Jefferson, SNB President Thomas Jordan and ECB chief economist Philip Lane speak during conference in Zurich, Tuesday-Wednesday

• Chicago Fed President Austan Goolsbee speaks, Tuesday

• Bank of England chief economist Huw Pill speak during event, Tuesday

• China retail sales, industrial production, fixed-asset investment, Wednesday

• Japan GDP, industrial production, Wednesday

• UK CPI, Wednesday

• US retail sales, business inventories, PPI, Empire manufacturing, Wednesday

• Target earnings, Wednesday

• China new home prices, Thursday

• US initial jobless claims, industrial production, Thursday

• Walmart earnings, Thursday

• US President Joe Biden and Chinese President Xi Jinping expected to speak at APEC leaders summit, Thursday

• Cleveland Fed President Loretta Mester, New York Fed President John Williams and Fed vice chair for supervision Michael Barr speak, Thursday

• Bank of England deputy governor Dave Ramsden and ECB President Christine Lagarde speak at event, Thursday

• US housing starts, Friday

• US Congress faces a midnight deadline to pass a federal spending measure, Friday

• ECB President Christine Lagarde speaks, Friday

• Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins and San Francisco Fed President Mary Daly speak, Friday

Some of the main moves in markets include:

Stocks

• S&P 500 futures were little changed as of 2:32 p.m. Tokyo time. The S&P 500 was little changed

• Nasdaq 100 futures rose 0.1%. The Nasdaq 100 fell 0.3%

• Euro Stoxx 50 futures were little changed

• Japan’s Topix index rose 0.5%

• Hong Kong’s Hang Seng Index was little changed

• China’s Shanghai Composite Index rose 0.1%

• Australia’s S&P/ASX 200 Index rose 0.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0694

• The Japanese yen was little changed at 151.71 per dollar

• The offshore yuan fell 0.1% to 7.3029 per dollar

• The Australian dollar fell 0.2% to $0.6365

Cryptocurrencies

• Bitcoin rose 0.3% to $36,589.53

• Ether was little changed at $2,059.24

Bonds

• The yield on 10-year Treasuries declined one basis point to 4.63%

• Japan’s 10-year yield declined 1.5 basis points to 0.855%

• Australia’s 10-year yield was little changed at 4.66%

Commodities

• West Texas Intermediate crude rose 0.3% to $78.46 a barrel

• Spot gold fell 0.1% to $1,944.64 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Jason Scott.

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.