(Bloomberg) – Stocks extended gains in Asia on Monday as investors gauge whether inflation will pick up and a recession is preventable.
Most read from Bloomberg
Chinese technology shares helped Asia’s stock index rise more than 1.5%. European indices, S&P 500 and Nasdaq 100 futures rose slightly. Global stocks last week posted their best monthly results.
A quarterly rebalancing of an institutional buyer’s portfolio can help the stock. Marko Kolanovic of JPMorgan Chase & Co. is calling for shares to rise 7% this week as pension funds and sovereign wealth funds change exposure.
Treasuries slipped, pushing the rate on the US 10-year bond to 3.16%. Yields have fallen from June highs on growth worries, but whether that marks the end of the Treasury bear market remains a direct debate.
The yen strengthened against the dollar, while the greenback gauge fell.
Industrial metals rebounded and oil steadied around $107 a barrel. The degree of improvement in the Chinese economy amid the easing of Covid restrictions may help sentiment towards raw materials.
Investors are analyzing incoming data to find out if the highest inflation in a generation is nearing its peak. Over time, that could give policymakers the latitude to cushion sharp interest rate hikes. A more troubling scenario is that price pressures persist and policy tightens even as the global economy slows.
Carol Pepper, founder of Pepper International, said on Bloomberg Radio: “There is a feeling that things are not as bad as we thought. “There’s hope that maybe we’re oversold, maybe there won’t be a recession,” she added.
San Francisco Federal Reserve Bank President Mary Daly on Friday said she favors another 75 basis point rate hike in July. Meanwhile, Fed Bank of St. President James Bullard.
Default Russia
In another development, Russia defaulted on its sovereign debt in foreign currency for the first time in a century, culminating in increasingly stringent Western sanctions that shut down payment routes.
Traders are watching the summit of the Group of 7 leaders, who plan to pledge indefinite support to Ukraine in its defense against Russian aggression. In addition, the G-7 is also putting pressure on Russian oil prices.
The US, UK, Japan and Canada also plan to announce a new ban on gold imports from Russia during the G-7 summit. Precious metal prices increased.
In crypto, Bitcoin and a host of other tokens weakened a bit but the largest virtual currency holds above $21,000.
What to watch this week:
-
US durable goods, second
-
San Francisco Fed President Mary Daly commented, Tuesday
-
ECB President Christine Lagarde, Federal Reserve Chair Jerome Powell, BOE Governor Andrew Bailey and Cleveland Fed President Loretta Mester will speak at the ECB event, Wednesday
-
US GDP, Wednesday
-
Fed President St. Louis James Bullard speaking, Wednesday
-
China PMI, Thursday
-
US Consumer Earnings, PCE deflator, Initial Jobless Claims, Thursday
-
Eurozone CPI; US Construction Spending, ISM Manufacturing, Friday
Some key moves in the market:
Inventory
-
S&P 500 futures were up 0.1% at 6:37 a.m. in London. S&P 500 up 3.1%
-
Nasdaq 100 futures rose 0.2%. Nasdaq 100 up 3.5%
-
Japan’s Topix index up 1%
-
Australia’s S&P/ASX 200 Index is up 1.9%
-
South Korea’s Kospi rose 1.9%
-
Hong Kong’s Hang Seng Index up 2.5%
-
China’s Shanghai Composite Index rose 0.7%
-
Euro Stoxx 50 futures up 0.5%
Currency
-
The Bloomberg Dollar Spot Index is down 0.1%.
-
The euro was at $1.0565, up 0.1%
-
Japanese yen at 134.81 a dollar, up 0.3%
-
Overseas yuan at 6.6810 per dollar
Bonds
Goods
-
West Texas Intermediate crude at $107.39 per barrel, down 0.2%
-
Gold at $1,835.67 an ounce, up 0.5%
Most read from Bloomberg Businessweek
© 2022 Bloomberg LP
