Asian stocks trade mixed as bond sales jump
Stocks fluctuated in Japan and were down in Australia. Futures for Hong Kong signaled the shares may open little changed.
Asian stocks opened mixed as trading resumed in most of the region’s markets following a holiday on Monday. Investors are weighing JPMorgan Chase & Co.’s purchase of First Republic Bank along with expectations the Federal Reserve will hike interest rates once again this week.
Stocks fluctuated in Japan and were down in Australia. Futures for Hong Kong signaled the shares may open little changed. While China will stay closed until Thursday, concerns remain about its economy’s patchy emergence from the pandemic lockdowns. The latest indicators point to a contraction in manufacturing, while consumers splurge over the holidays and the housing market continues to rebound.
The dollar was steady and Treasuries were little changed in early Asia trading after selling off across the curve Monday, with yields on 30-year bonds climbing the most in 2023 and those on 10-year notes approaching 3.60 percent. Swap traders have slightly upgraded the odds the Fed will raise its policy rate by a quarter point Wednesday.
Australian bonds fell while traders awaited a policy decision where the nation’s central bank is likely to extend a pause in rate increases following a deceleration in inflation.
Meanwhile, US Treasury Secretary Janet Yellen issued a dire warning by telling lawmakers on Monday that the nation risked default as soon as June 1. That came amid a high-stakes game of chicken in Washington over the debt limit.
“As a market participant, we don’t really need any more ups and downs caused by things outside of the market itself and earnings,” Kim Forrest, chief investment officer at Bokeh Capital Partners, said on Bloomberg Radio. “Everyone on both sides of the aisle should listen to her,” the Pennsylvania-based Forrest said, referring to Yellen.
In the US investment-grade bond market, issuance jumped to more than $22 billion in one of the busiest sessions of 2023. Several borrowers are piling in after exiting their earnings blackouts. Among notable firms tapping the market: Meta Platforms Inc raised $8.5 billion, Comcast Corp priced a $5 billion deal and Hershey Co sold $750 million in bonds.
Rising corporate bond offerings in the US usually represent a double-whammy for Treasuries, which tend to fall amid competition from new debt and as underwriters sell government notes to rate-lock the issue for corporate buyers. Another factor weighing on bond prices Monday was the stabilization in sentiment after JPMorgan acquired First Republic.
Elsewhere, oil held a loss as concerns over China’s economic outlook and caution in financial markets dominated sentiment. Gold was little changed.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM
Wine shops and bars to remain shut for 4 days in Mumbai in 4 weeks, check details
May 15, 2024 7:52 PM
INDIA bloc will win majority seats in Bihar, says Tejashwi Yadav
May 15, 2024 4:20 PM