Asian Stocks Rise, US Futures Drop Amid Fed Focus: Markets Pack

(Bloomberg) — Asian stocks rose as US stock futures moved lower at the start of a pivotal week for investors who will see interest rate decisions from central banks, including the Federal Reserve.

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Shares rose in Japan, South Korea and Australia, while contracts for Hong Kong rose earlier after shares on Wall Street recovered on Friday. The greenback made small progress against most major currencies, indicating caution among traders.

10-year Treasury yields have changed little, around 4%, amid fears that inflation will slow any move by policymakers to slow down aggressive rate hikes. A core measure of US inflation accelerated in September, bolstering the case for another 75 basis point jumbo move. Revenues fluctuated in Australia.

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Economists polled by Bloomberg expect Fed officials to maintain their aggressive stance and lay the groundwork for interest rates reaching 5% by March 2023, potentially leading to a US and global recession.

“The question is: will the story of frontloading end? I think the market out there is waiting for this pivot,” Priya Misra, global head of rate strategy at TD Securities, told Bloomberg Radio. “I just think if the Fed can signal that they can go to 75 and then slow the pace of the increases, I think the market will be comforted by that.”

Still, Apple Inc.’s earnings report encouraged. technology stocks, leading the S&P 500 and Nasdaq 100 to their longest weekly gains since August. An index of Asian stocks rose for the fourth time in five days on Monday.

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Story continues

Traders in Asia will also watch this session with China’s official PMIs, which are expected to show a recovery that is struggling to gain traction.

Brazil’s local assets will weaken Monday after Luiz Inacio Lula da Silva wins the presidential election. The magnitude of the market decline will depend on whether President Jair Bolsonaro will relent, as a contested election would likely cause greater losses.

Meanwhile, wheat skyrocketed after Russia abandoned a major agreement to allow Ukrainian harvest shipments.

Oil headed for its first monthly gain since May, ahead of production cuts by the OPEC+ alliance, which may further narrow the market.

Main events this week:

Companies reporting earnings this week include: Modernna, Pfizer, Airbnb, AIG, Maersk, Barrick Gold, BMW, Bharti Airtel, BP, ConocoPhillips, Estee Lauder, Ferrari, ING, Intercontinental Exchange, KKR, Mitsui, Newmont , Petrobras, Qualcomm, Restaurant Brands, Saudi Arabian Oil, SoftBank, Sony, Starbucks, Toyota, Uber and Yum! Brands.

China Manufacturing and Non-Production PMI, Monday

Eurozone CPI and GDP, Monday

Reserve Bank of Australia policy decision, Tuesday

US Construction Spending, ISM Manufacturing Index, Tuesday

EIA Crude Oil Inventory Report, Wednesday

Federal Reserve Interest Rate Decision, Wednesday

US MBA Mortgage Applications, ADP Employment, Wednesday

Bank of England interest rate decision, Thursday

US Factory Orders, Durable Goods, Trading, Initial Unemployment Claims, ISM Service Index, Thursday

ECB President Christine Lagarde speaks, Thursday

US Nonfarm Payrolls, Unemployment, Friday

Some of the key moves in markets:

Shares

S&P 500 futures fell 0.2% as of 9:26 a.m. Tokyo time. The S&P 500 rose 2.5% on Friday

Nasdaq 100 futures fell 0.4%. The Nasdaq 100 rose 3.2%

Japan’s Topix index rose 1.1%

South Korean Kospi index rose 0.4%

Australian S&P/ASX 200 Index rose 1.1%

Hong Kong’s Hang Seng Index futures rose 0.9%

currencies

The Bloomberg Dollar Spot Index rose 0.1%

The euro had changed little at $0.9958

The Japanese yen fell 0.3% to 148.05 per dollar

The offshore yuan fell 0.3% to 7.2869 per dollar

cryptocurrencies

Bitcoin fell 0.3% to $20,628.11

Ether fell 0.2% to $1,592.64

bonds

Raw materials

West Texas Intermediate crude rose 0.4% to $88.23 a barrel

Spot gold fell 0.1% to $1,642.91 an ounce

–With help from Garfield Reynolds.

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