Asian Stocks Were Mixed, Yen Little Changed, Korean Won And Pound Rose 

Asian stocks were mixed as Chinese shares swung between gains and losses and a North Korean missile test overshadowed a surge in U.S. equities. The dollar was steady as U.S. tax cuts inched closer to reality.

Shares in Tokyo ended higher with bank and insurers underpinning gains, and the S&P 500 Index jumped 1 percent on Tuesday as the Senate budget committee advanced the Republican tax bill, also buoying the greenback. Australian shares rose and Hong Kong equities fluctuated. Stocks in Seoul gave up earlier gains as investors considered the latest intercontinental ballistic missile launch from North Korea. Bitcoin surpassed $10,000 for the first time, bringing this year’s price surge to more than 10-fold.

“The crux of it is that people ascribe a very low likelihood of it developing into something more sinister,” said Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7 billion. “Markets are choosing to focus on the positives: that tax reform might be more likely, we’re still getting good corporate news, and all the economic data is ticking over pretty nicely.”

North Korean leader Kim Jong Un said his regime completed its nuclear program after firing a missile that put the entire U.S. in range. The missile launch shattered a two-month period of relative quiet in its first provocation since U.S. President Donald Trump’s decision this month to label the country a state sponsor of terrorism. Trump responded that “we will take care of that situation.” The U.S. and Japan said the projectile was fired early Wednesday Japan time from North Korea’s west coast at a lofted trajectory before landing in the Sea of Japan.

The Senate tax bill is headed for a marathon debate this week after the budget committee voted Tuesday along party lines to send the Republican plan to the floor. Republican holdouts, Bob Corker of Tennessee and Ron Johnson of Wisconsin, dropped their objections shortly before the vote.

Fed chairman nominee Jerome Powell faced his Senate confirmation hearing in Washington, saying during testimony the case for a December rate hike “is coming together.” In a statement ahead of the meeting, the current member of the board of governors signaled broad support for how the Fed operates, regulates and guides the economy.

U.S. consumer confidence unexpectedly improved in November to a 17-year high, a sign Americans are growing more upbeat about the economy and labor market. That comes as global equities head into the end of the year at record highs, on track for one of the best year’s since the immediate aftermath of the global financial crisis.

Here are some key events coming up this week:

• In China later this week, the official and Caixin manufacturing PMIs are expected to show mostly steady momentum.
• Japan industrial production is forecast to have rebounded in October, but CPI may show a sharp divergence between headline and core inflation, Bloomberg Intelligence said.
• The second print of third-quarter U.S. GDP on Wednesday may be revised up thanks to consumer spending and inventory accumulation, Bloomberg Intelligence said. The core PCE deflator, the Fed’s preferred gauge of inflation, is due Thursday.
• OPEC meets in Vienna on Thursday.

These are the main moves in markets:

Stocks

• The Topix index gained 0.8 percent at the close in Tokyo and the Nikkei 225 Stock Average rose 0.5 percent.
• Hong Kong’s Hang Seng Index was up 0.1 percent and the Shanghai Composite Index also rose 0.1 percent.
• Australia’s S&P/ASX 200 Index rose 0.5 percent.
• The Kospi index was flat.
• Futures on the S&P 500 Index were little changed. The underlying gauge rose 1 percent Tuesday.
• The MSCI Asia Pacific Index rose 0.2 percent.

Currencies

• The Bloomberg Dollar Spot Index was steady.
• The yen was little changed at 111.54 per dollar.
• The Korean won rose 0.4 percent to 1,080.25 per dollar, shrugging off the threat from North Korea. The markets are preparing for a Bank of Korea rate decision on Thursday.
• The euro was at $1.1851.
• The pound rose 0.3 percent to $1.3373. It got a boost on reports of a breakthrough in negotiations over the U.K.’s exit from the European Union.
• Bitcoin was trading at $10,463.46.

Bonds

• The yield on 10-year Treasuries was little changed at 2.32 percent.
• Australia’s 10-year yield fell more than two basis points to 2.47 percent.

Commodities

• West Texas Intermediate crude lost 0.5 percent to $57.70 a barrel, down for a third day. U.S. industry data showed crude stockpiles expanded before OPEC meets to decide on prolonging supply cuts past the end of March.
• Gold rose 0.1 percent to $1,295.45 an ounce.

Source: Bloomberg – Asia Stocks Mixed as Missile Offsets U.S. Rally: Markets Wrap

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