(Bloomberg) -- Stocks in Asia extended gains as risk appetite across financial markets got a further boost from China’s latest stimulus measures and upbeat US momentum.
Equities in Australia advanced, while China’s benchmark CSI 300 Index is set for its biggest weekly gain in almost a decade after officials pledged to increase fiscal support and stabilize the property sector to revive growth. Further bullishness came from US economic data overnight while Japan’s Nikkei index was poised to erase all losses since the Bank of Japan’s July 31 interest rate hike.
Futures for US indexes were little changed early Friday after the S&P 500 climbed to its 42nd closing record of this year. The dollar edged higher on Friday after falling it is previous session while 10-year US Treasury yields were flat.
Stimulus in the world’s two largest economies has been a catalyst for markets this week, with gold headed for a third weekly gain and China lowering the amount of cash banks must keep in reserve on Friday, ahead of a weeklong holiday. The Federal Reserve’s preferred inflation indicator and a snapshot of consumer demand are both due later Friday, and will provide additional cues on the path for US interest rates.
“Greater stimulus measures out of China and the market pricing an aggressive Fed easing cycle, while the US economy is strong, bode well for risk assets,” Elias Haddad, a strategist at Brown Brothers Harriman, wrote in a note. “This encouraging risk backdrop is a drag on the dollar mostly against growth-sensitive currencies.”
Elsewhere in Asia, the yen was weaker against the greenback early Friday ahead of a leadership election in Japan. Consumer inflation in Tokyo eased this month after outgoing Prime Minister Fumio Kishida reinstated energy subsidies to help households cope with one of the hottest summers on record.
US Economy
Revised data showed the US economy in better shape than initially expected, spurred mainly by bigger consumer-driven growth fueled by robust incomes. A decline in US jobless claims underscored the resilience of the labor market. But investors tuning into commentary from Fed Chair Jerome Powell on Thursday didn’t get any details on the economic outlook or path for monetary policy.
Federal Reserve Governor Lisa Cook said she “wholeheartedly” supported the central bank’s move last week to cut interest rates by a half percentage point, but didn’t say how much more easing might be needed in the near term.
“We think there is the potential that economic data will be more resilient, especially on jobs, than the market is expecting,” said Peter Tchir, head of macro strategy at Academy Securities.
US stock indexes were also propelled higher on Thursday by Micron Technology Inc., which gave a strong forecast aided by AI demand. On the other hand, news of the US Justice Department’s probe of Super Micro Computer Inc. — also a beneficiary of the AI boom — pushed its shares lower.
In commodities, oil slid further as Saudi Arabia was reportedly committed to increasing output in December, while Libya named its new central bank governor, opening the way to reviving some crude production. Copper rallied back above $10,000 a ton and iron ore broke through $100 while gold hit yet another record high on Thursday.
Key events this week:
- China industrial profits, Friday
- Eurozone consumer confidence, Friday
- US PCE, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were unchanged as of 10:03 a.m. Tokyo time
- Hang Seng futures rose 2.7%
- Nikkei 225 futures (OSE) rose 1.4%
- Japan’s Topix fell 0.3%
- Australia’s S&P/ASX 200 was little changed
- Euro Stoxx 50 futures rose 0.3%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was little changed at $1.1169
- The Japanese yen fell 0.5% to 145.47 per dollar
- The offshore yuan fell 0.2% to 6.9845 per dollar
Cryptocurrencies
- Bitcoin rose 0.9% to $65,234.73
- Ether rose 0.3% to $2,640.12
Bonds
- The yield on 10-year Treasuries was unchanged at 3.80%
- Japan’s 10-year yield declined two basis points to 0.810%
- Australia’s 10-year yield advanced two basis points to 3.96%
Commodities
- West Texas Intermediate crude fell 0.5% to $67.32 a barrel
- Spot gold fell 0.1% to $2,669.32 an ounce
This story was produced with the assistance of Bloomberg Automation.
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