Yen little change, Pound increased, Euro flat, Asia Stocks advanced; Investors Review 

• Fed officials, ECB’s Draghi are due to speak this week

• Global stocks near all-time highs as tech continues rebound

Asian stocks advanced as technology shares continued a recovery and oil climbed for a third straight session after entering a bear market last week.

Equities from South Korea to Hong Kong rose as crude futures held above $43 a barrel. Technology shares had the biggest advance in the MSCI Asia Pacific Index. The yen was little changed against the dollar. The pound climbed for a fourth day amid Brexit negotiations by U.K. Prime Minster Theresa May, whose leadership remains under threat.

An absence of catalysts over the weekend left investors awaiting clues from central bankers on policy paths for some of the world’s biggest economies. Federal Reserve Bank of San Francisco President John Williams made the case Monday for further gradual interest rate increases, saying he expects inflation to rise to the central bank’s 2 percent target next year as unemployment edges lower. Later on, European Central Bank President Mario Draghi will make speak in Portugal before Fed chair Janet Yellen makes an appearance in London on Tuesday.

Markets were gripped last week by a plunge in oil while equities, the dollar and Treasuries all made little headway. Global stocks remain near all-time highs, with the Bloomberg Dollar Spot Index on course for its first back-to-back quarterly declines in three years as investors question the inflation outlook. With Bank of Japan Governor Haruhiko Kuroda also speaking at the ECB forum, the heads of key central banks have the chance this week to shape discussion by offering more clues on future policy.

There is “very little risk we see any central bank surprises,” Robert Rennie, Sydney-based head of global market strategy at Westpac Banking Corp., told Bloomberg TV. “It looks like it’s a positive summer for risk sentiment. That certainly favors higher equity and higher yielding currencies at least in the very short term.”

Economic data may also drive momentum in financial markets, with key reports due on inflation, employment, manufacturing and housing from China to the U.S. Markets in India, Malaysia, Indonesia, Philippines, Singapore and Bangladesh are closed Monday for a holiday.

What’s on investors’ watch lists this week:

• U.S. spending data this week may reveal consumers are only moderately rebounding and the inflation backslide is continuing — two things which suggest central bankers should feel little need to rush, according to Bloomberg Intelligence. Durable goods orders on Monday are expected to show a 0.6 percent decline, as lack of details surrounding tax and trade reform cause reduced order activity.
• China’s PMI might have declined in June after unexpectedly remaining unchanged in May, reflecting government offers to cut overcapacity and leverage. The official manufacturing measure is estimated to have dropped to 51 from 51.2.
• Also due this week: Japanese inflation, factory output, unemployment, household consumption and housing starts.

Here are the main moves in markets:

Commodities

• West Texas Intermediate oil climbed 1.2 percent to $43.52 a barrel as of 2:12 p.m. in Tokyo. Futures are up 2.3 percent over the past three days, after dropping more than 20 percent from a February high.
• Gold declined 0.2 percent to $1,254.33 an ounce, after a three-day advance.

Stocks

• The MSCI Asia Pacific Index rose 0.3 percent. Hon Hai Precision Industry Co. jumped 6.2 percent, the most since April, and Samsung Electronics Co. gained 1.4 percent to lead an advance among technology shares.
• Japan’s Topix rose 0.1 percent. Trading was suspended in Takata Corp. after the air-bag maker filed for bankruptcy protection in the biggest corporate failure in postwar Japanese manufacturing.
• Australia’s S&P/ASX 200 Index climbed 0.1 percent and South Korea’s Kospi increased 0.4 percent, poised for an all-time closing high.
• Hong Kong’s Hang Seng Index added 0.4 percent and the Hang Seng China Enterprises Index advanced 0.6 percent. The Shanghai Composite Index gained 0.8 percent while Taiwan’s Taiex jumped 1.1 percent to the highest level since 1990.
• Futures on the S&P 500 were little changed. The underlying gauge rose 0.2 percent last week as tech shares extended a rebound.

Currencies

• The yen was little changed at 111.32 per dollar. While the currency has increased for four straight days, the gains have been incremental, with each session marking an advance of less than 0.1 percent.
• The pound increased 0.2 percent to $1.2740, bringing its four-day gain to 0.9 percent. The euro was flat at $1.1189.
• The Bloomberg Dollar Spot Index was little changed after three days of declines. The South Korean won climbed 0.3 percent, increasing for a third session.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.15 percent.
• The yield on Australian government bonds with a similar maturity fell less than one basis point to 2.37 percent.

Source: Bloomberg – Asia Stocks Advance as Crude Gains for Third Day: Markets Wrap

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