Industry
Asian stock markets fled from Monday’s highs as disappointing news about U.S. consumer sentiment felt a sense of danger ahead of a close reading of the health of China’s economy.
PHOTO FILE: A man with a protective face mask walks past a screen showing a graph showing the average recent Nikkei dose outside of a fracture, among the coronavirus infection (COVID-19) revolution, in Tokyo, Japan November 2, 2020. REUTERS / Issei Kato
SYDNEY: Asian stock markets halted losses early Monday as data confirmed that the Chinese economy had bounced back in the last quarter as factory production jumped, helping to correct recent disappointing news about US consumer spending.
Chinese blue chips rose 0.4per percent after the economy reported a 6.5per percent growth in the fourth quarter of last year, surpassing a forecast of 6.1per cents.
Business output for December also beat estimates, although retail sales were missing the mark.
MSCI’s broadest index of Asia-Pacific shares outside of Japan trimmed losses and were off 0.2per percent, after hitting a series of peaks in recent weeks passed. Japan’s Nikkei slipped 0.8per percent and away from a 30-year high.
E-Mini futures for the S&P 500 fell 0.3per percent, although Wall Street will be closed Monday for holidays. EUROSTOXX 50 futures discounted 0.2per cents and FTSE futures 0.1per cents.
The build-up in China was quite different from that of the U.S. and Europe, where the spread of coronavirus has damaged consumer spending, exemplified by the U.S. false sales reported on Friday.
There are also doubts about the amount of U.S. President Joe Biden ‘s incentive package to carry through Congress due to Republican opposition, and the threat of more mob violence at his first visit Wednesday.
“The data raises questions about the stability of the recent trend of higher bond yields and the rise in inflation compensation,” analysts at ANZ said in a note.
“There is a lot of good news about vaccines and incentives being priced into equities, but hope is being challenged by the reality of the next few months,” they warned. locks will be extended, and US issues could pick up suddenly as the UK COVID variable spreads. “
That will shift the focus to earnings management from this week’s corporate results, which include BofA, Morgan Stanley, Goldman Sachs and Netflix.
Bad U.S. Treasury data helped with some of their recent steep losses and 10-year yields traded at 1.087per percent, down from a peak of 1.187per percent last week.
The calmer sentiment then led to a rise in the safe US dollar, capturing a very short bearish market. Speculators increased the net short dollar position to its highest level since May 2011 in the week ending January 12th.
The dollar index fired to 90.786, and away from the recent 2-1 / 2 year pool at 89.206.
The euro had bounced back to US $ 1.2074, from its January high of US $ 1.2349, while the dollar remained stable on the yen at 103.80 and well above the recent low of 102.57.
The Canadian dollar fell to US $ 1.2773 per dollar after Reuters reported that Biden intended to revoke the license for the Keystone XL oil pipeline.
Biden’s election for Treasury Secretary Janet Yellen is expected to refuse to seek a weaker dollar when he tests Capital Hill on Tuesday, the Wall Street Journal reported.
Gold prices weakened by the kick-off of the dollar leaving the metal down at US $ 1,824 an ounce, against its January peak of US $ 1,959.
Oil prices plummeted to take advantage amid the spread of increasingly tight locks around the globe destroying demand.
Brent crude futures went off 52 cents at US $ 54.58 a barrel, while US crude rallied 46 cents to US $ 51.90.
(Edited by Shri Navaratnam and Gerry Doyle)