Asia Stocks Seen Higher, Bonds Slide on U.S. Data: Markets Wrap

Bloomberg

Published Sep 05, 2019 22:48

Updated Sep 06, 2019 05:08

Asia Stocks Seen Higher, Bonds Slide on U.S. Data: Markets Wrap

(Bloomberg) -- Stocks in Asia looked set for gains after a strong session on Wall Street as a slew of data bolstered confidence in the American economy. Treasuries tumbled.

Futures ticked higher in Japan, Hong Kong and Australia. The S&P 500 advanced over 1% as trade hostilities appeared to ease between the U.S. and China. Strong private payrolls data and a better-than-expected reading on the services sector tamped down recession angst. Yields on Treasuries jumped amid a deluge of investment-grade corporate supply. The dollar edged lower.

News that top Chinese and American officials agreed to restart talks aimed at ending the trade war is helping boost sentiment and adds to a renewed appetite for risk assets that took hold earlier in the week. After the strong U.S. economic data, focus is now likely to shift to remarks from Federal Reserve Chairman Jerome Powell and the latest jobs report, both due Friday.

“While this has been some positive economic data, it makes it a little more difficult for the Fed to cut rates,” Kristina Hooper, chief global market strategist at Invesco Ltd., told Bloomberg TV. “I suspect what we will hear from Powell is a very tepid commentary on the Fed’s ability to provide monetary policy accommodation.”

Elsewhere, Florida orange groves seemingly escaped major damage from Hurricane Dorian, but concern is now turning to soy, corn and cotton fields as well as livestock in Georgia and the Carolinas as the storm churns northward.

Here are some key events coming up:

  • Fed speakers this week include Fed chair Jerome Powell on Friday.
  • The U.S. jobs report on Friday is projected to show the widely watched nonfarm payrolls rose by 160,000 in August, versus 164,000 the month prior. Estimates are for unemployment to be steady at 3.7% and the average hourly earnings rate of increase to slow to 3%.
These are the main moves in markets:

Stocks

  • The S&P 500 Index increased 1.3%.
  • Futures on Japan’s Nikkei 225 added 0.3%.
  • Hang Seng futures earlier advanced 0.2%.
  • Futures on Australia’s S&P/ASX 200 Index rose 0.2%.
Currencies

  • The yen was at 106.95 per dollar.
  • The offshore yuan was at 7.1370 per dollar.
  • The Bloomberg Dollar Spot Index was little changed.
  • The euro held at $1.1035.
Bonds

  • The yield on 10-year Treasuries climbed nine basis points to 1.56%.
Commodities