Singapore, Nov. 1 (BNA): Asian stocks fluctuated Monday, as Japanese companies received a boost after the election but weak Chinese data weighed on the mood ahead of policy meetings in the United States, Britain and Australia that are set to set. Price forecast.
Japan’s Nikkei rose 2.3% to a one-month high after Prime Minister Fumio Kishida’s Liberal Democratic Party won an unexpectedly comfortable victory, raising hopes for stability and stimulus in the next term.
Trade elsewhere was weak, with MSCI’s index of Asia-Pacific shares outside Japan down 0.4% by selling in Hong Kong after weekend data showed a more-than-expected contraction in Chinese factory activity.
S&P 500 and FTSE futures were up 0.2%, and European futures were up 0.6%. Bond markets were calm in the wake of the short-term interest rate sell-off last month as rising inflation reshaped investor expectations.
Commodities also stabilized, with a slight drop in oil prices and an additional drop in Chinese coal prices, pushing them 50% below last month’s high.
“I think we may come out of last week’s peak yield volatility, or at least, the previous peak price hike fever,” John Briggs, strategist at NatWest Markets, told Reuters.
“A lot of things that have gone parabolic and the expectations of a market price hike bringing the market to a boil at least seem to cool off a bit.”
The two-year Treasury yield, which jumped to a nearly 20-month high of 0.5640% last week, was last up 1.6 basis points at 0.5169%. The 10-year Treasury yield was stable at 1.5627%.
In the currency markets, the dollar maintained sharp gains on Friday and traded flat in the Asian trading session. It rose to 114.26 yen and rose 0.1% to $1.1546 per euro.
Brent crude futures fell 0.3 percent to $83.47 a barrel, and US crude fell 0.4 percent to $83.20.
The Federal Reserve is the most important event in a week filled with central bank meetings likely to move the markets, with the possibility of policy adjustments at the Bank of England and the Reserve Bank of Australia.
The Federal Reserve, which concludes its two-day meeting on Wednesday, is expected to say it will begin to scale back bond purchases, though markets focus on clues about a rate hike.
Fed Fund Futures 0#FF: Price hikes started as early as the second half of 2022 and Goldman Sachs on Friday withdrew its rally forecast to July next year starting in the third quarter of 2023.
“While maintaining the view that most of the inflation we are seeing will prove transient, the risk management mindset has taken hold, and developed market central banks are now changing course,” Goldman Sachs analysts said in a note released late Friday.
“The Bank of England is likely to raise rates and the RBA appears to have given up on the yield curve linkage.”
Swaps pricing suggests a better chance of break-even for the BoE on Thursday while the RBA is likely to make a directive adjustment after pulling back to defend its yield target on Monday.
However, supply crept back into the turbulent Australian bond market, and three-year Australian government bond futures raised 18 mark to 98.780.
The British pound rose to a two-week low of $1.3663.
On the data front, there are PMI numbers for Scandinavia, Britain and the United States.
Asian readings were mixed, with the Kaxin poll confounding the soft official reading on Sunday and strong surveys in Thailand, Malaysia, Vietnam and Indonesia, versus slowing in South Korea.
Gold suffered losses on Friday against the strong US dollar and bought $1,784 an ounce. Bitcoin held its $60,000 support level.
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