Asian Stocks Mixed as Dollar Gauge Holds Advance: Markets Wrap


(Bloomberg) — Asian stocks were mixed Thursday and the dollar held around a 16-month high after the latest Federal Reserve minutes flagged the risk of a faster reduction in stimulus to fight elevated inflation.

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Equities rose in Japan but fell in Australia and South Korea. U.S. futures fluctuated after the S&P 500 and tech-heavy Nasdaq 100 edged up on below average trading volumes ahead of the U.S. Thanksgiving holiday.

Fed officials at their last meeting were open to removing policy support at a faster pace to curb inflation. U.S. reports since then flagged persisting price pressures and a robust recovery, including resilient consumer spending.

Expectations of an earlier Fed interest-rate liftoff saw shorter maturity Treasury yields advance, while longer-maturity rates retreated, flattening the bond curve. There’s no cash Treasuries trading due to the U.S. holiday.

Global stocks have dipped from all-time highs as central banks cut back on monetary accommodation. Assets from equities to commodities and cryptocurrencies have delivered substantial gains this year. Investors are questioning how much further they can go as liquidity tailwinds start to cool.

Read More: Love Affair With Riskiest Assets Turns Turbulent on Fed Fears

“These minutes were hawkish,” Priya Misra, TD Securities global head of rates strategy, said on Bloomberg Television. “The market has moved the timing of the first rate hike now to June of 2022 which implies this earlier end to QE is already priced in. The market is going to struggle until we get more data.”

U.S. reports showed personal spending rose in October from a month earlier by more than expected, while a closely watched inflation measure posted the largest annual increase in three decades. Jobless claims fell to the lowest since 1969.

Fed’s Daly

San Francisco Fed President Mary Daly said it would be hard to argue against a faster reduction in bond purchases if reports on the labor market and consumer prices due out early next month show continued strength.

Elsewhere, oil was steady as traders await the response of OPEC+ to a coordinated release of strategic reserves by consuming nations.

In the Asia Pacific, South Korea is expected to follow New Zealand in hiking interest rates as policy makers try to contain increases in the cost of living.

The Mexican peso held a slump following an announcement of a new central bank chief that raised questions about the independence of the country’s monetary authority.

For more market analysis, read our MLIV blog.

Here are some key events this week:

  • Bank of Korea policy decision Thursday

  • U.S. Thanksgiving Day: U.S. equity, bond markets closed Thursday

  • Bank of England Governor Andrew Bailey speaks with Mohamed El Erian at a Cambridge Union event. Thursday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1% as of 9:25 a.m. in Tokyo. The S&P 500 rose 0.2%

  • Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.4%

  • Japan’s Topix index rose 0.4%

  • Australia’s S&P/ASX 200 Index fell 0.2%

  • South Korea’s Kospi index rose 0.4%

  • Hang Seng Index futures fell 0.4% earlier

Currencies

  • The Japanese yen was at 115.43 per dollar

  • The offshore yuan traded at 6.3953 per dollar

  • The Bloomberg Dollar Spot Index was flat

  • The euro was at $1.1209

Bonds

Commodities

  • West Texas Intermediate crude was at $78.39 a barrel

  • Gold was at $1,791.70 an ounce, up 0.2%

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Read More: Asian Stocks Mixed as Dollar Gauge Holds Advance: Markets Wrap

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