Asian Stocks Drift; Treasuries, Dollar Steady: Markets Wrap

(Bloomberg) -- Asian stocks drifted Tuesday as risk appetite remained subdued and the earnings season continued. The yen edged higher, while the dollar and Treasuries were little changed.

Equity benchmarks ticked higher in Japan and Korea with Australian shares posting declines with trading volumes below their 30-day averages. Hong Kong and Chinese stocks outperformed as investors deemed the nation’s equities cheap after the recent sell-off. A Reuters report that the Bank of Japan had considered raising interest rates this year helped the yen gain.

Earlier, the S&P 500 Index closed at its highest since January as Berkshire Hathaway Inc. bolstered financial shares and higher oil prices boosted energy producers. The yield on 10-year Treasuries held below 3 percent and the Cboe Volatility Index fell to its lowest since Jan. 26.

Asian Stocks Drift; Treasuries, Dollar Steady: Markets Wrap

Investors largely shrugged off early concern sparked by China’s signal it won’t flinch in a trade war, adding to heightened rhetoric from U.S. President Donald Trump. Meanwhile, geopolitical concerns continue to lurk in the background with confusion about the status of negotiations intended to lead to the denuclearization of the Korean peninsula and the Trump administration moving to restore some U.S. sanctions on Iran.

Elsewhere, the pound was little changed after weakening to an 11-month low on Brexit angst. Turkey’s lira advanced after sinking to a record low as heightened concern over a diplomatic spat with the U.S. overshadowed the central bank’s attempt to support the currency. U.S. crude traded around $69 a barrel after Saudi Arabian production cuts heightened concerns about tightening worldwide supplies.

Terminal users can follow our Markets Live blog here.

Here are some key events coming up this week:

  • Earnings season includes results from: Japan Post Bank, Disney, 21st Century Fox, Deutsche Telekom, China Mobile, Glencore and Adidas.
  • Tuesday brings the latest Reserve Bank of Australia meeting that is forecast to produce no change in either the record-low cash rate or the long-term guidance.
  • The Bank of Japan releases a summary of opinions Wednesday from its July 30-31 meeting, at which it tweaked elements of its stimulus policy to make it more sustainable.
  • Samsung Electronics unveils its next Galaxy Note smartphone.
  • U.S. consumer prices probably rose in July, consistent with a pickup in inflation that’s projected to keep the Federal Reserve on a path of gradual interest-rate increases, economists forecast before Friday’s release.

These are the main moves in markets:

Stocks

  • Topix index rose 0.4 percent as of the break in Tokyo.
  • Australia’s S&P/ASX 200 Index fell 0.4 percent.
  • South Korea’s Kospi index rose 0.3 percent.
  • Hong Kong’s Hang Seng Index added 0.9 percent.
  • Shanghai Composite Index gained 1.4 percent.
  • Futures on the S&P 500 were little changed. The S&P 500 rose 0.4 percent Monday.

Currencies

  • The Japanese yen rose 0.1 percent to 111.34 per dollar after declining 0.2 percent.
  • The offshore Chinese yuan traded at 6.8638 per dollar.
  • The euro was at $1.1558 after reaching the weakest in almost 13 months on its fifth straight decline.
  • The British pound traded at $1.2942, near the weakest in about 11 months.
  • The Bloomberg Dollar Spot Index was little changed around the highest in more than two weeks.

Bonds
  • The yield on 10-year Treasuries held at 2.94 percent.
  • Australia’s 10-year bond yield fell five basis points to 2.67 percent.
  • The yield on 10-year Japanese bonds was at 0.11 percent.