Most Asian equities fell on Tuesday, as concerns that China is slowing loan growth dampened sentiment after U.S. stocks broke a record of optimism about the recovery of the world’s largest economy. Treasury bills and the dollar went up.
The Asia-Pacific stock indicator fell for the first time in four days, led by losses in Japan. US stock futures were slightly in the red, while European contracts were pointing up. The S&P 500 overnight reached an all-time record with most of its major groups advancing. The US Internet and technology megacap shares have soared, including a rise from Facebook Inc. to a new peak, with the Nasdaq 100 up 2%.
In China, the central bank he asked the country’s main lenders to reduce loan growth by the end of this year, according to people familiar with the matter. Meanwhile, oil has reduced part of Monday’s decline, which was caused by delays in Europe’s reopening due to the increase in virus cases, as well as imminent Iranian supplies.
US data continued to highlight an economic recovery as more Americans are vaccinated against the coronavirus, restrictions are reversed and fiscal relief begins to take hold. US service providers experienced the fastest growth ever recorded in March, as orders jumped to new highs. But other parts of the world are still struggling to contain the pandemic and are lagging behind in vaccinations.
“It looks like the spectacular US data has some caveats that apply to the ‘tide raising all boats’ assumption,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “On the one hand, there is a feeling that the vaccine’s differentials can only mean an uneven recovery. Worse, it can also mean having to deal with higher yields from the US Treasury in a more fragile state, ”especially for emerging markets, he said.
Secretary of the Treasury Janet Yellen reiterated its view that the $ 1.9 trillion pandemic relief bill signed last month will not increase inflationary pressures and suggested that low interest rates will continue to prevail in the years to come. Her too exposed the case for a harmonized corporate tax rate in the world’s major economies in his first major speech on international economic policy.
Meanwhile, Credit Suisse Group AG began to unload shares linked to Archegos Capital Management’s turmoil more than a week after some rivals divested their shares and sidestepped the losses.
Mitul Kotecha, chief strategist for emerging markets for Asia and Europe at TD Securities, discusses the outlook for the dollar and emerging market assets.
Some important events to watch this week:
- The 2021 Spring Meetings of the International Monetary Fund and the World Bank Group take place virtually. U.S. Treasury Secretary Janet Yellen is among the participants in a climate discussion on Tuesday. Federal Reserve Chairman Jerome Powell participates in a panel on the global economy on Thursday.
- The Fed publishes the minutes of its March meeting on Wednesday.
- Japan released its balance of payments figures on Thursday.
- Chinese consumer and producer price data are released on Friday.
These are some of the main movements in the markets:
Stocks
- S&P 500 futures fell 0.2% as of 1:01 pm in Tokyo. The S&P 500 was up 1.4%. Nasdaq 100 futures fell 0.1%.
- Japan’s Topix index lost 1.4%.
- Australia’s S & P / ASX 200 index rose 1%.
- South Korea’s Kospi index has changed little.
- China’s Shanghai Composite index lost 0.3%.
- Euro Stoxx 50 futures were up 0.7%.
Coins
- The yen was trading at 110.37 per dollar, down 0.2%.
- The offshore yuan was 6.5612 per dollar.
- The Bloomberg Dollar Spot Index was up 0.1%.
- The euro was at $ 1.1802, down 0.1%.
Titles
- Yield on 10-year Treasury bills fell by a basis point to 1.69%.
- Yield on Australia’s 10-year bonds fell five basis points to 1.79%.
Commodities
- West Texas Intermediate crude rose 1% to $ 59.20 a barrel. It fell 4.6% in the previous session.
- Gold added 0.3% to $ 1,733.26 an ounce.
– With the help of Michael Tobin, Claire Ballentine and Rita Nazareth