Asia Stocks Rise on China Exports, Finance Sector: Markets Wrap

(Bloomberg) -- Asian stocks gained for a fourth day as investors parsed trade data from China, which showed further growth in exports as global demand rebounded.

Benchmarks rose in mainland China and Japan, while dropping in Hong Kong and Australia. Shares of Chinese brokers surged amid speculation of further policy support for the financial sector. A call by the country’s regulators on lower commissions for housing sales and rentals also boosted sentiment, driving the shares of developers higher.

Futures for the S&P 500 and Nasdaq 100 both edged lower in Asia after the S&P 500 ended Monday fractionally higher. The tech-heavy Nasdaq 100 gained 0.3% as AI-capable chipmakers Advanced Micro Devices Inc. and Nvidia Corp. rose alongside Google-parent Alphabet Inc. 

China’s exports rose 8.5% in April, beating economists forecasts, signaling global demand remains robust. Imports, though, dropped 7.9%, worse than the median projection in a Bloomberg survey. The offshore yuan weakened.

“We’re seeing very significant and ahead-of-expectation strength coming out of the export sector,” James Sullivan, head of Asia Pacific equity research at JPMorgan Chase & Co., said on China’s economy on Bloomberg Radio. “That’s counter to what we’re seeing particularly out of tech exports in Korea and Taiwan, and it’s very clear evidence that there’s not a lot of decoupling actually going on on the ground.”

The yen strengthened against all its Group-of-10 peers. Bank of Japan Governor Kazuo Ueda said earlier the central bank will end its yield-curve-control policy if it reaches its 2% price goal. 

The dollar steadied after posting gains Monday following the release of the Federal Reserve’s Senior Loan Officer Opinion Survey that signaled the credit market was tightening, while business loan demand was weakening. 

Treasury futures edged higher in Asia trading after falling Monday as investors considered what it would take to finally reverse the Fed’s path on rates. Bond trading desks are bracing for as much as $35 billion of corporate debt sales this week, while Apple Inc. kicked off a $5.25 billion sale.

Investors will be watching US President Joe Biden and congressional leaders as they are set to discuss the debt-ceiling issue. Meanwhile, consumer-inflation data Wednesday may provide further clues on the Fed’s path and set the tone for equities.

Debt Impasse

For the time being, the debt ceiling impasse is offering a short-term yield opportunity, according to Asia Pacific strategists at Saxo Capital Markets, including Charu Chanana. 

“Further concerns on credit tightening or delays in debt ceiling solution could continue to drive up short-term Treasury yields, potentially in three months, as investors hedge against a possible default,” they wrote in a note.

Attention in Asia is now turning to Australia, where the government is expected to announce its first budget surplus since 2008. Windfall tax revenue from high employment and elevated commodity export prices combine to swell the government’s coffers. 

Elsewhere in markets, oil fell as investors assessed a complex outlook for global demand after a period of volatile trading. Gold gained and Bitcoin held below $28,000. 

Key events this week:

• US President Joe Biden scheduled to meet with congressional leaders on debt limit, Tuesday
• New York Fed President John Williams speaks to Economic Club of New York, Tuesday
• US CPI, Wednesday
• China PPI, CPI, Thursday
• UK BOE rate decision, industrial production, GDP, Thursday
• US PPI, initial jobless claims, Thursday
• Group of Seven finance minister and central bank governors meet in Japan, Thursday
• US University of Michigan consumer sentiment, Friday
• Fed Governor Philip Jefferson and St. Louis Fed President James Bullard participate in panel discussion on monetary policy at Stanford University, Friday.

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 1:21 p.m. Tokyo time. The S&P 500 was little changed Monday
• Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.25%
• Japan’s Topix index rose 1.2%
• Hong Kong’s Hang Seng Index fell 0.5%
• China’s Shanghai Composite Index rose 0.4%
• Australia’s S&P/ASX 200 Index fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0993
• The Japanese yen rose 0.1% to 134.95 per dollar
• The offshore yuan was little changed at 6.9240 per dollar
• The Australian dollar was little changed at $0.6784

Cryptocurrencies

• Bitcoin rose 0.3% to $27,653.17
• Ether rose 0.2% to $1,845.81

Bonds

• The yield on 10-year Treasuries declined one basis point to 3.50%
• Japan’s 10-year yield advanced two basis points to 0.43%
• Australia’s 10-year yield advanced six basis points to 3.46%

Commodities

• West Texas Intermediate crude fell 0.3% to $72.95 a barrel
• Spot gold rose 0.2% to $2,024.95 an ounce

This story was produced with the assistance of Bloomberg Automation.

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