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Asian equities pared earlier gains, with a rise in shares in Australia and South Korea offset by declines in Hong Kong and China. The dollar steadied as Treasury yields climbed to the highest since May 2014.
The MSCI Asia Pacific Index was little changed with energy and materials stocks outperforming and consumer staples lagging. The yen fell as the Bank of Japan downplayed Governor Haruhiko Kuroda’s comments on improving inflation. Sterling slipped as Prime Minister Theresa May remained under pressure from pro-Brexit lawmakers in her Conservative Party. The euro steadied and German government bonds retreated.
“The higher Treasury 10-year yield is spurring dollar buying,” said Ko Haruki, head of the financial solutions group at CIBC World Markets (Japan) in Tokyo. “The dollar is consolidating with major currencies failing to break Thursday’s highs.”
Investor focus is back on earnings and economic data this week after markets were roiled last week by protectionist rhetoric and conflicting positions on the dollar from U.S. President Donald Trump and some of his top officials. The week will also include the final Federal Reserve meeting presided over by Chair Janet Yellen. The value of global equities has surpassed $60 trillion this year and government bond yields have rallied as investors assess the outlook for inflation alongside a gentle improvement in global economic growth.
Elsewhere, U.S. oil is at the strongest level in five months relative to global benchmark Brent crude as a weaker dollar and tumbling stockpiles boost the American marker.
Here are some important things to watch out for this week:
Earnings season sees some technology giants report, including: Alibaba Group Holding Ltd., Apple Inc., Facebook Inc. and Amazon.com Inc.
Federal Reserve policy makers gather for Chair Janet Yellen’s final meeting on interest rates before her term ends.
Bank of England Governor Mark Carney will speak before the U.K. Parliament’s Economic Affairs Committee in London Tuesday.
Gauges of Chinese manufacturing and services industries are due Wednesday.
GDP reports including India and Taiwan are due Wednesday.
U.S. employers probably added more jobs in January than a month earlier, while the jobless rate held at an almost 17-year low and the pace of wage growth picked up from a year ago, economists forecast the government report will show Friday.
Donald Trump delivers his first State of the Union address on Tuesday.
These are the main moves in markets:
Stocks
The MSCI Asia Pacific Index was unchanged as of 4:09 p.m. Tokyo time.
Japan’s Topix index rose 0.1 percent.
Hong Kong’s Hang Seng Index fell 0.5 percent.
Australia’s S&P/ASX 200 Index rose 0.4 percent.
Futures on the S&P 500 Index fell less than 0.05 percent.
Currencies
The Bloomberg Dollar Spot Index rose less than 0.05 percent.
The Japanese yen declined 0.2 percent to 108.80 per dollar.
The euro fell less than 0.05 percent to $1.2425.
Bonds
The yield on 10-year Treasuries rose three basis points to 2.69 percent.
Japan’s 10-year yield increased one basis point to 0.088 percent.
Commodities
West Texas Intermediate crude rose 0.2 percent to $66.26 a barrel.
Gold fell less than 0.05 percent to $1,348.94 an ounce.
LME copper rose 0.9 percent to $7,147.00 per metric ton.
Source: Bloomberg
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