The Main Moves In Financial Markets; Asian Stocks Rose, Euro Steady 

Asian stocks rose, halting a retreat from historic highs after a four-day decline. Australian bonds climbed after a rally in Treasuries spurred in part by the global equities sell-off.

Shares in Japan advanced, with the Topix index on track to break its longest losing streak this year. Benchmarks were also higher in Sydney, Seoul and Hong Kong. The S&P 500 Index pared the worst of Wednesday’s losses as bank shares rallied, but that wasn’t enough to overcome the biggest drop in two months for U.S. equities. The Korean won strengthened to its highest level since last September. China’s central bank boosted the supply of cash in the financial system by the most since January amid a decline in bonds and stocks.

U.S. inflation data did little to alter the likelihood of the Federal Reserve lifting interest rates again next month, as core prices picked up in October, and retail sales indicated resilient demand heading into the holiday shopping season. In the Asia-Pacific region, Australia reported a smaller gain in jobs than forecast for October. Next up: a rate decision in Indonesia.

Equity-market volatility measures have been climbing since the record high reached last week for global shares gave way to five days of declines. Global growth remains healthy and earnings forecasts strong, despite uncertainty surrounding U.S. tax reform. The gap between two-year and 10-year U.S. yields shrank to a fresh low for 2017, a potential concern given how a flattening in the yield curve has sometimes served as a precursor to an economic downturn.

The People’s Bank of China injected a net 310 billion yuan ($47 billion) through reverse-repurchase agreements on Thursday, the biggest one-day addition since Jan. 18. The cash injections come after the benchmark 10-year yield surged past 4 percent for the first time in three years on Tuesday.

The U.S. tax plan is encountering stumbling blocks, with some opponents coming out against aspects of the proposals ahead of a Thursday vote on the tax-overhaul bill.

Here are some key events slated for the remainder of this week:

• Bank of England officials address the bank’s future on Thursday, while European Central Bank chief Mario Draghi speaks Friday.
• A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.

And these are the main moves in markets:

Stocks

• The Topix index climbed 0.6 percent at the 11:30 a.m. break in Tokyo after on Wednesday sinking the most since March. The Nikkei 225 Stock Average added 0.8 percent.
• Australia’s S&P/ASX 200 Index was up 0.2 percent.
• South Korea’s Kospi index climbed 0.5 percent.
• Hong Kong’s Hang Seng Index added 0.4 percent. The Shanghai Composite Index fell 0.2 percent.
• Futures on the S&P 500 Index were up 0.1 percent. The underlying gauge fell 0.6 percent Wednesday.
• The MSCI Asia Pacific Index rose 0.5 percent.

Currencies

• The Bloomberg Dollar Spot Index was little changed, after touching the lowest in almost four weeks Wednesday.
• The won jumped past 1,100, rising as much as 1.2 percent against the dollar.
• The Australian dollar bought 76.01 U.S. cents, up 0.1 percent, getting some support from full-time positions surging in October.
• The Japanese yen was at 113.04 per dollar, near the strongest in about a month, after rising 0.5 percent in the previous session.
• The euro was steady at $1.1784.

Bonds

• The yield on 10-year Treasuries was steady at 2.34 percent. It declined five basis points in the previous session.
• Australia’s 10-year yield dipped one basis point to 2.58 percent, around the lowest since the end of June.

Commodities

• West Texas Intermediate crude was steady at $55.35 a barrel after dropping 0.7 percent.
• Gold was little changed at $1,278.40 an ounce.

Source: Bloomberg – Asia Stocks Gain, Halting Slide; Won, Aussie Rise: Markets Wrap

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