Asian Stocks Advance on Growth Optimism; Yen Drops: Markets Wrap

Asian stocks rose after American and Chinese economic data spurred optimism the global economy is gathering momentum, with U.S. jobs numbers due Friday ahead of a long weekend in America. The yen dropped for a third day this week.

Equities rose in Tokyo, Seoul and Sydney at the open after the MSCI Asia Pacific Index completed its eighth straight month of gains and nudged closer to its highest in almost a decade. The dollar was steady after declining on weak inflation data and as U.S. Treasury Secretary Steven Mnuchin said a weaker currency is “somewhat better” for trade. Australian bond yields fell with those on U.S. Treasuries. Gasoline continued its march upwards to the highest level in more than two years amid the impact of Harvey.

U.S. consumer spending increased by less than estimated in July, though rising incomes and an upward revision to June purchases put the economy on a stable footing for the second half. The focus now turns to jobs data on Friday for more clarity on the next move in interest rates from the Federal Reserve. The latest economic statistics reinforced that price pressures remain benign, while GDP and jobs growth are robust.

In Asia, the market will be parsing Caixin’s China PMI for whether the official figure’s sound growth reflects the whole of the manufacturing economy. The measure is expected to decline to 51 for August from 51.1.

Terminal subscribers can read more on our Markets Live blog.

Among other key events this week:

  • Various Asia PMIs, also those for Germany, France U.K. and the euro zone ahead of the European Central Bank rates decision next week.
  • Capital investment by Japanese companies fell well short of expectations in the second quarter. South Korea’s GDP rose 2.7 percent in the second quarter from a year earlier.
  • U.S. non-farm payrolls data for August is due Friday, along with unemployment and earnings numbers, and the Markit U.S. PMI. U.S. employment probably increased by 180,000 in August, in line with this year’s monthly average, while the jobless rate held at 4.3 percent, economists forecast.
  • Singapore and Malaysia are closed for holidays.

And here are the main moves in markets:

Stocks 

  • Japan’s Topix index gained 0.1 percent as of 9:23 a.m. Tokyo time, while the Kospi index in South Korea rose 0.2 percent, as did Australia’s main gauge.
  • Hang Seng Index futures were little changed.
  • Contracts on the S&P 500 were up 0.1 percent after the underlying measure rose 0.6 percent.
  • The MSCI Asia Pacific Index climbed 0.2 percent.

Currencies

  • The yen fell 0.1 percent to 110.07 per dollar after rising 0.2 percent.
  • The Bloomberg Dollar Spot Index was steady after falling 0.2 percent.
  • The euro was unchanged at $1.1908, near the strongest since 2015.

Bonds

  • The yield on 10-year Treasuries was steady at 2.12 percent. It fell 18 basis points last month.
  • The Australian 10-year bond yield fell three basis points to 2.68 percent.

Commodities

  • West Texas Intermediate crude fell 0.5 percent to $46.98 a barrel.
  • Gold was little changed at $1,321.58 an ounce after capping its best month since January.
  • Gasoline for September advanced on Thursday for an eighth day, up 14 percent to $2.1399 a gallon. Earlier, the front-month contract touched the highest since July 2015. The October contract was little changed at $1.7757 a gallon early Friday.

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