Asia Stocks To Tread Water Ahead Of Inflation Week: Markets Wrap

(Bloomberg) — Asian stocks are set for a steady open as focus shifts to this week’s inflation reports from the US, Japan and China after mixed jobs and activity data on Friday capped a downbeat start to the year. (Bloomberg) — Asian stocks are set for a steady open as focus shifts to this week’s inflation reports from the US, Japan and China after mixed jobs and activity data on Friday capped a downbeat start to the year. Australian equities were little changed in early trading and contracts in Hong Kong point to a flat start, while Japanese markets are closed for a holiday.

The dollar and US equity futures were steady after the S&P 500 rose 0. 2% on Friday following reports that US jobs beat expectations but the service sector slowed. Last week ended as the worst for global equities since October as markets were rattled by a deluge of corporate issuance and the Federal Reserve indicated no rush to cut interest rates.

Traders are now looking to the US inflation print this week as they cling to hopes for easing by March. “The first week of 2024 brought contradictory data signals,” Barclays economists including Christian Keller wrote in a note to clients. “Solid US jobs growth, cautious Fed minutes and a still robust US economy raise doubts about markets’ aggressive Fed rate cut expectations.

” The jobs report initially cooled wagers on faster and deeper rate cuts from the Fed. But swaps traders eventually reformed bets on roughly 140 basis points of easing this year, with about a two-thirds chance of a decrease in March. Some on Wall Street kept faith in the central bank’s ability to cool the economy while side-stepping a downturn.

But many were skeptical about the prospect of deeper rate cuts after the payrolls report — noting the devil was in the details. The data did little to change the views of economists at Goldman Sachs Group Inc. and JPMorgan as the banks reiterated their forecasts on rate cuts.

“This number does question the confidence of the market around the March cut,” said Lindsay Rosner, a portfolio manager at Goldman Sachs Asset Management. “We’ve got three inflation prints between now and the March meeting. Every number counts.

” CPI Reports Thursday’s US inflation print is expected to see the underlying measure ease further to 3. 8% year-on-year in December from 4% in the month prior, according to a Bloomberg survey. Reports in China and Tokyo — a barometer for broader Japan — are also due, as investors look to the People’s Bank of China for policy easing while debate rages on about when the Bank of Japan will start to exit its extreme settings.

“Tokyo’s headline and core rates are seen continuing to ease and that will underscore the lack of pressure on the BOJ, especially in the aftermath of the recent earthquake, to change policy,” said Marc Chandler, chief market strategist at Bannockburn Global. While China’s expected to report less disinflation, “the economy needs more support and a cut in the benchmark one-year Medium Term Lending Facility later this month seems increasingly likely. ” Read More: Yen Closes Worst Week Since 2022 as Earthquake Shifts BOJ Calls Elsewhere, Boeing Co.

shares will be in focus when Wall Street opens as groundings of the 737 Max 9 aircraft gathered pace globally after a fuselage section on a brand-new Alaska Airlines jet blew out during flight. In commodities, oil was steady after it climbed on Friday, cementing a weekly gain, as simmering tensions in the Middle East and North Africa eclipsed signs of weakening US demand. Rick Rieder, CIO of global fixed income at BlackRock, says the US economy is “not falling off a cliff anytime soon,” as he examines the US December jobs report.

Source: Bloomberg Some key events this week: Eurozone economic confidence, retail sales, consumer confidence, Monday Chile copper exports, CPI, trade, Monday Atlanta Fed President Raphael Bostic speaks, Monday US House returns from recess, Monday Australia retail sales, Tuesday Eurozone unemployment, Tuesday Japan Tokyo CPI, household spending, Tuesday Poland rate decision, Tuesday Colombia CPI, Tuesday South Korea jobless rate, Wednesday World Economic Forum’s global risks report released, Wednesday New York Fed President John Williams speaks, Wednesday Deadline for US Securities & Exchange Commission to vote on Bitcoin ETF applications, Wednesday South Korea rate decision, Thursday US CPI, initial jobless claims, Thursday Argentina CPI, Thursday Brazil CPI, Thursday Peru rate decision, Thursday Riksbank Deputy Governor Per Jansson speaks, Thursday ECB Governing Council member Boris Vujčić speaks, Thursday China CPI, PPI, trade, Friday India CPI, industrial production, Friday France CPI, Friday Spain CPI, Friday Minneapolis Fed President Neel Kashkari speaks, Friday Bank of America, Bank of New York Mellon, BlackRock, Citigroup, JPMorgan Chase and Wells Fargo report fourth-quarter results, Friday Stocks S&P 500 futures rose 0. 1% as of 8:26 a. m.

Tokyo time Australia’s S&P/ASX 200 was little changed Hang Seng futures were little changed Currencies The euro was little changed at $1. 0940 The Japanese yen was little changed at 144. 73 per dollar The offshore yuan was little changed at 7.

1664 per dollar The Australian dollar was unchanged at $0. 6713 Bonds Australia’s 10-year yield advanced six basis points to 4. 19% Cryptocurrencies Bitcoin fell 0.

9% to $43,854. 44 Ether fell 1. 2% to $2,215.

14 Commodities West Texas Intermediate crude rose 0. 1% to $73. 89 Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson. More stories like this are available on bloomberg. com ©2024 Bloomberg L.

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