Stocks in Asia traded mixed and the dollar hovered near the lowest level in almost three months ahead of holidays in the US and Japan.
Stocks gained in Japan, and those in Hong Kong moved slightly higher, with Baidu Inc. a top performer following better-than-expected third-quarter results. Asian artificial intelligence stocks slipped after Nvidia Corp.’s earnings got a tepid reaction from investors. Trading is becoming more muted in the leadup to the Japan and US Thanksgiving holidays on Thursday.
Mainland Chinese shares also fell, with tech and industrial companies among the laggards. Chinese stocks will remain around current levels for some time, according to Hao Hong, chief economist at Grow Investment Group.
“There are so many unresolved issues that are overhanging the Chinese market,” Hong said on Bloomberg Television. “The property bubble probably takes some years to resolve. So as a result, you will see lots of headline risk, but then at the same time you see lots of policy supports.”
US equity futures steadied after the Nasdaq 100 Index sank 0.6% Tuesday. Treasuries were little-changed in Asian hours after climbing Tuesday, led by the shorter end. The greenback traded in narrow ranges against its Group-of-10 peers.
“With volatility low and the market pricing a ‘soft landing’ in the US, the US dollar can stay heavy this week,” Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia, wrote in a note.
The offshore yuan extended its winning streak into a fifth day after China’s central bank set the currency fixing at the strongest level since June. The yuan had jumped beyond the daily reference rate for the first time since July in the previous session.
Cryptocurrencies were down as Binance Holdings Ltd. and its CEO Changpeng “CZ” Zhao pleaded guilty to antimoney-laundering and US sanctions violations under a sweeping settlement with the US. The deal allows Binance to continue operating, though Zhao stepped down as CEO and will be replaced by Richard Teng. Bitcoin fell as much as 3.2% to $35,663, and Ether declined as much as 2.8% to $1,930.75.
Proceeding Carefully
The Fed’s minutes released Tuesday show policymakers united around a strategy to “proceed carefully” on future interest-rate moves and base any further tightening on progress toward their inflation goal. Swap contracts linked to Fed meetings currently price in around 25% probability of a first Fed rate cut in March.
“We should not attach too much value anymore to the remaining hike that is implied in the September dot plot,” Philip Marey, senior US strategist at Rabobank, wrote in a note. “If we were to see stronger economic and inflation data before the December meeting, longer-term rates are likely to rebound and substitute for a rate hike. Therefore we do not expect further hikes.”
Meanwhile, among areas of focus in Asia is China’s latest probe into company executives after the arrest of game-streaming company DouYu International Holdings Ltd.’s founder Chen Shaojie on unspecified charges. A series of unexplained executive detentions have created jitters across the country’s private sector.
Geopolitics is still in focus too. Israel’s deal with Hamas will free about 50 hostages in return for a four-day pause in fighting in the Gaza Strip, and some Palestinians will be released from Israeli prisons.
Elsewhere, oil steadied, with signs of another stockpile build in the US coming ahead of an OPEC+ meeting on supply over the weekend.
Key events this week:
- Eurozone consumer confidence, Wednesday
- US initial jobless claims, University of Michigan consumer sentiment, durable goods, Wednesday
- Bank of Canada Governor Tiff Macklem speaks, Wednesday
- Eurozone S&P Global Manufacturing & Services PMI, Thursday
- US markets closed for Thanksgiving holiday while Japan is off for Labor Thanksgiving — Thursday
- ECB publishes account of October policy meeting, Thursday
- Black Friday, traditional kickoff for the US holiday shopping season
- ECB’s Christine Lagarde speaks, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 12:12 p.m. Tokyo time. The S&P 500 fell 0.2%
- Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.6%
- Japan’s Topix index rose 0.7%
- Hong Kong’s Hang Seng Index was little changed
- China’s Shanghai Composite Index fell 0.3%
- Australia’s S&P/ASX 200 Index fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0918
- The Japanese yen rose 0.2% to 148.14 per dollar
- The offshore yuan was little changed at 7.1394 per dollar
- The Australian dollar was little changed at $0.6558
Cryptocurrencies
- Bitcoin fell 1.5% to $36,299.64
- Ether fell 0.7% to $1,972.09
Bonds
- The yield on 10-year Treasuries advanced one basis point to 4.41%
- Japan’s 10-year yield advanced 1.5 basis points to 0.710%
- Australia’s 10-year yield was little changed at 4.44%
Commodities
- West Texas Intermediate crude fell 0.2% to $77.62 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Rob Verdonck, Toby Alder, Masaki Kondo and Matthew Burgess.
