Australian Dollar Jumped, Euro Was Steady; Key Financial Events In The Coming Days
The Australian dollar jumped on stronger-than-expected retail sales data and comments on inflation from the central bank. Stocks in Asia traded mixed as investors assessed gains spurred by the passage of the U.S. tax cuts in the Senate that lifted equities to fresh highs.
Benchmark indexes fluctuated in Tokyo as investors rotated out of tech stocks into banks, while Hong Kong shares fell. The MSCI Asia Pacific Index erased earlier losses as S&P 500 Index futures advanced, though tech shares on the Asian gauge declined after the tech-heavy Nasdaq fell. The dollar pulled back as optimism about tax reform died down and Treasury yields were steady in Asia after handing back part of their advance on Monday.
The Australian dollar advanced to the strongest in more than three weeks after October retail sales beat estimates and the Reserve Bank of Australia said it sees inflation quickening as it left its cash rate at a record-low 1.5 percent for a 15th straight meeting on Tuesday.
In China, a private report on services indicated that the sector expanded more firmly last month than in October. Caixin’s China composite and services PMIs came in at 51.6 and 51.9, respectively, in November. It’s the latest data point for a world economy that’s chugging along enough for some central banks to be raising rates and winding down stimulus programs.
The pound erased remained under pressure after erasing gains as talks between the U.K. and the EU failed to produce an agreement on Brexit negotiations with the Irish border remaining a sticking point.
India’s dominant services sector contracted in November, a private gauge showed a day before the central bank decides on interest rates. The Nikkei India Services Purchasing Managers’ Index was 48.5 last month, slipping below the 50 mark that separates growth and contraction.
Here are some of the key events facing markets in the coming days:
- The European Commission College of Commissioners discusses Brexit on Wednesday and will likely make its recommendation on whether sufficient progress has been made to move negotiations onto the future relationship.
- The U.S. faces a partial government shutdown after money runs out on Dec. 8 if Congress can’t agree on a spending bill by then.
- U.S. employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report Friday may also show a bump up in average hourly earnings.
- Other countries setting monetary policy this week include Brazil, Canada, and Poland.
These are the main moves in markets:
- The Topix index gained 0.2 percent at the Tokyo close and the Nikkei 225 Stock Average lost 0.4 percent.
- Australia’s S&P/ASX 200 Index dropped 0.2 percent at the close.
- The Kospi index in Seoul was up 0.2 percent.
- Hong Kong’s Hang Seng Index fell 0.6 percent and the Shanghai Composite Index was down 0.2 percent.
- S&P 500 Index futures rose 0.2 percent. The main gauge fell 0.1 percent on Monday and the Nasdaq Composite Index lost 1.1 percent.
- The MSCI Asia Pacific Index was little changed.
- The Bloomberg Dollar Spot Index fell 0.1 percent.
- The yen lost 0.2 percent to 112.58 per dollar.
- The Aussie dollar climbed 0.7 percent to 76.51 U.S. cents. The New Zealand dollar jumped 0.5 percent to 68.93 U.S. cents after comments from the central bank’s acting governor. Grant Spencer said the Reserve Bank of New Zealand was becoming more flexible in its inflation targeting. The two antipodean currencies had the biggest gains against the greenback on the Bloomberg dollar index.
- The euro was steady at $1.1867.
- The pound was at $1.3470.
- The yield on 10-year Treasuries was more than one basis point higher at 2.39 percent after climbing as much as six basis points in the previous session.
- Australia’s 10-year yield rose six basis points to 2.60 percent.
- West Texas Intermediate crude was flat at $57.47 a barrel after slumping 1.5 percent.
- Gold traded at $1,275.86 an ounce.