Asian stocks rose as better-than-expected U.S. growth data added to evidence of improving global economic health, with investors awaiting key earnings results and an announcement on who will helm the Federal Reserve.
Equities in Australia and South Korea climbed and Japan’s Topix index hovered around the highest since 2007 following another record for the SP 500 Index Friday. Profit reports due this week from some of the world’s largest companies may show if there’s enough juice in the earnings season to propel another leg higher for global shares. Bond and currency markets continue to be gripped by speculation around who U.S. President Donald Trump will choose as the next Fed chair, with Governor Jerome Powell said to be the front-runner.
Trump last week stoked the sense of drama surrounding his choice, tweeting a video teasing an announcement he said would come this week. The president is leaning toward appointing Powell, according to three people familiar with the matter. Meantime, Bank of Japan Governor Haruhiko Kuroda looks favored to steer monetary policy for another five years after his current term ends in April, the Nikkei newspaper reported, without citing anyone.
Earnings are coming thick and fast. Sinopec and PetroChina probably improved earnings in the third-quarter as higher oil prices helped refining margins, analysts said. Their results are in focus after Exxon and Chevron each posted double-digit profit increases on Friday. Three of China’s big four banks report on Monday, after China Construction Bank earnings last week fueled optimism that interest margins and asset quality are improving. Shares have jumped this year on optimism a regulatory crackdown has eased and growth will boost earnings.
In Spain, the next hurdle in the battle with Catalonian separatists comes Monday, when public employees have to decide which side to follow. Barcelona’s streets flooded with hundreds of thousands of pro-unity demonstrators over the weekend, pressuring local lawmakers who pledged to defy Madrid’s direct control of the region. Prime Minister Mariano Rajoy on Friday ousted Catalan’s President Carles Puigdemont and dissolved his government after it declared independence.
On the U.S. political scene, developments in Washington will be closely watched after a grand jury approved the first charges stemming from special counsel Robert Mueller’s probe into Russian meddling in the 2016 election and possible collusion with Donald Trump’s campaign, according to multiple news reports.
Terminal users can read more in our Markets Live blog.
Here are some key upcoming events this week:
- President Donald Trump has said he’ll reveal his choice to lead the Fed by Friday.
- The Fed’s next rate decision is on Wednesday, with economists expecting the central bank to keep rates at 1.25 percent and to increase them at the December meeting.
- The U.S. October payroll report comes out Friday. On Monday, personal income and spending data comes out, which features the Fed’s preferred inflation gauge.
- Trump starts an 11-day trip to Asia, his first as president, on Friday. He’s scheduled to visit Japan, South Korea, China, Vietnam and the Philippines for talks with leaders and to visit the APEC and Asean summits. Trade and security issues — particularly North Korea — will probably be in focus.
- A week packed with earnings releases culminates with Apple Inc. results Friday.
And these are the main moves in markets:
Stocks
- Japan’s Topix index was flat as of 9:18 a.m. in Tokyo.
- South Korea’s Kospi index gained 0.4 percent.
- Australia’s SP/ASX 200 Index rose 0.1 percent.
- Futures on Hong Kong’s Hang Seng Index gained 0.3 percent in most recent trading.
- Futures on the SP 500 Index slid 0.2 percent. The underlying gauge climbed 0.8 percent Friday, when the Nasdaq Composite surged 2.2 percent.
Currencies
- The Bloomberg Dollar Spot Index was flat.
- The yen was at 113.72, near its weakest since July.
- The euro was little changed at $1.1606 and the pound traded at $1.3135.
- The Aussie bought 76.71 U.S. cents.
- The New Zealand dollar fell 0.3 percent to 68.59 U.S. cents. The country’s new finance minister said at the weekend that reforming the Reserve Bank of New Zealand’s monetary policy mandate could potentially result in lower interest rates.
Bonds
- The yield on 10-year Treasuries was little changed at 2.41 percent after rising as high as 2.48 percent during the Friday session.
- Australia’s 10-year yield declined five basis points to 2.72 percent in early Monday trading.
Commodities
- West Texas Intermediate crude rose 0.3 percent to $54.05 after rising 2.4 percent on Friday, when it touched the highest in about six months.
- Gold slipped 0.2 percent to $1,271.68 an ounce.