Asia Stocks Mixed Before Key Europe, U.S. Events 

Asia Stocks Mixed Before Key Europe, U.S. Events

• Oil crawls back after tumbling Wednesday on stockpiles report
• Investors remain cautious; yen erases loss on BOJ report

Investors were reluctant to add big positions ahead of key events looming in Europe and the U.S. The yen reversed declines on a Bank of Japan report, while oil nudged higher.

The yen erased losses on a report that the BOJ is re-calibrating its communications over how to handle a future exit from monetary stimulus. Oil recovered a small portion of the more than 5 percent plunge triggered by a report showing a rise in U.S. crude stockpiles. The MSCI Asia Pacific Index was little changed before the European Central Bank’s policy decision, the U.K. election and former FBI Director James Comey’s testimony. Shares in Hong Kong held gains as data showed an acceleration in Chinese exports. Stocks in Seoul fell as North Korea launched a series of short-range missiles.

A pivotal day for capital markets on Thursday comes as renowned bond investor Bill Gross said levels of risk in markets are at the highest since before the 2008 financial crisis. Equity investors have been prepared to place their faith in an expanding global recovery, while fixed-income money managers have dialed back inflation expectations in the U.S.

Here are some of the key upcoming events:

• The ECB’s policy decision is followed by Mario Draghi’s address to reporters later in the day. Don’t expect policy changes, but the central bank may drop the reference to “downside” risks to growth, while reiterating a weak inflation outlook, Bloomberg Intelligence said. Here’s a preview.
• Investors are awaiting results from the U.K. elections. The polls close at 10 p.m. Thursday night in the U.K.
• Comey released prepared testimony saying the president asked him to end an investigation into the former national security adviser.

Here are the main moves in markets:

Stocks

• The MSCI Asia Pacific Index fell 0. 1 percent as of 2:04 p.m. in Tokyo.
• The Topix index was little changed, fluctuating between gains and losses after data showed Japan’s economy grew less than the government initially reported for the first quarter. Australia’s S&P/ASX 200 Index rose 0.1 percent.
• Hong Kong’s Hang Seng climbed 0.2 percent and the Shanghai Composite Index increased 0.1 percent. China’s exports rose 8.7 percent in May in dollar terms, above estimates for a 7.2 percent gain, as global demand shows signs of picking up.
• South Korea’s Kospi index lost 0.2 percent. North Korea launched a series of short-range missiles early Thursday that appeared to be designed to attack ships, the latest provocation by Kim Jong Un’s isolated regime.
• Futures on the S&P 500 added less than 0.1 percent after the underlying gauge added 0.2 percent on Wednesday.

Commodities

• WTI crude added 0.6 percent to $45.99 a barrel. Oil lost more than 5 percent Wednesday after an unexpected increase in U.S. crude and gasoline stockpiles stoked fears that the global supply glut will remain unabated.
• Gold slipped 0.1 percent to $1,285.61 an ounce, after dropping 0.6 percent in the previous session.

Currencies

• The Bloomberg Dollar Spot Index was flat. The pound was little changed at $1.2954, after climbing for four straight days.
• The yen climbed 0.2 percent to 109.65 per dollar after falling 0.4 percent Wednesday. The BOJ is re-calibrating its communications to acknowledge that it is thinking about how to handle a future exit from monetary stimulus, without giving the impression that this is on the agenda anytime soon, according to people with knowledge of discussions at the central bank.
• The Aussie dollar fell less than 0.1 percent after a report showed a weaker-than-expected trade balance.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.18 percent.
• Australian government notes with a similar maturity saw yields rise four basis points to 2.42 percent.

Source: Bloomberg – Asia Stocks Mixed Before Key Europe, U.S. Events: Markets Wrap

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