Tuesday, November 30

Stocks Steady Ahead of US CPI; Treasuries Dip: Markets Wrap


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(Bloomberg) — Stocks in Asia were steady Monday as investors keep watch on how price pressures impact monetary policy and the pace of economic recovery. Treasury yields rose.

Equities fell in Hong Kong and South Korea, and fluctuated in Japan. US futures dipped after all major US equity benchmarks climbed to records Friday, with the S&P 500 posting its fifth consecutive weekly rally. That was after a larger-than-forecast and broad -based gain in US payrolls that also showed a jump in average hourly earnings.

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Australian bonds rallied after the US 10-year Treasury yield tumbled below 1.5% on Friday. Markets will closely watch a read on US consumer prices this week. The dollar rose and the yen slipped.

Chinese stocks were little changed as the Communist Party meets for the first time in more than a year this week. The gathering is expected to lay the ground for extending the term of President Xi Jinping, who has rattled markets with his “common prosperity” campaign to redistribute the nation’s wealth.

The inflation debate continues to shadow the markets that had taken some comfort from a strong earnings season despite higher inflation and supply chain snarls. Federal Reserve Bank of Kansas City President Esther George said the risk of a prolonged period of elevated inflation has increased and the argument for patience has diminished.

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“Inflation is the major headwind right now,” Dana D’Auria, co-chief investment officer at Envestnet, said on Bloomberg Television. “There is a disconnect at this point between some of the expectations that we have about inflation and what consumers are feeling on the ground.”

US consumer prices on Wednesday are expected to show price pressures running at the hottest pace in three decades amid supply-chain bottlenecks and higher energy, according to Bloomberg Intelligence.

The October and November CPI numbers “are super important considerations to which way the Fed is going to go,” Mahjabeen Zaman, senior investment specialist at Citigroup, said on Bloomberg Radio. “We are of the view that there is upside risk in both these CPI numbers and as a result there is actually a risk the Fed might actually accelerate the pace of asset purchases.”

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Further on the economic front, China posted a record monthly trade surplus in October as exports surged, underscoring support for the Chinese economy that’s slowed sharply in recent months. In the US, the House on Friday passed the biggest US infrastructure package in decades.

Elsewhere, oil advanced as traders weighed the odds of a release of crude from the US Strategic Petroleum Reserve after OPEC+ resisted a plea from President Joe Biden to boost supplies more quickly. Bitcoin traded around $65,000.

What to watch this week:

China’s Communist Party’s decision-making Central Committee starts meeting Monday. Through Nov. 11.Federal Reserve Bank of San Francisco President Mary Daly speaks TuesdayChina aggregate financing, money supply, new yuan loans TuesdayChina PPI WednesdayU.S. wholesale inventories, CPI, initial jobless claims Wednesday U.S. bond marked is closed in observance of Veterans Day Thursday China holds its annual Singles’ Day, the world’s biggest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure buyers with bargains Thursday

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For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

S&P 500 futures slipped 0.2% as of 12:19 pm in Tokyo. The S&P 500 rose 0.4%Nasdaq 100 futures fell 0.4%. The Nasdaq 100 rose 0.1%Topix index was flatAustralia’s S&P/ASX 200 Index was little changedKospi index fell 1% Hang Seng Index fell 0.6%Shanghai Composite Index was little changedEuro Stoxx 50 futures were little changed

Currencies

The Japanese yen traded at 113.63 per dollar, down 0.2%The offshore yuan was at 6.3960 per dollarThe Bloomberg Dollar Spot Index rose 0.1%The euro was at $1.1561

Bonds

The yield on 10-year Treasuries rose two basis points to 1.47% Australia’s 10-year bond yield dropped five basis points to 1.76%

Commodities

West Texas Intermediate crude rose 1.3% to $82.29 a barrelGold was at $1,818.22 an ounce

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