(Bloomberg) — Stocks in Asia were broadly higher in choppy trading as the House passed a deal to avert US default and investors weighed the prospect of a pause in rate hikes from the Federal Reserve this month.
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A gauge of Asian shares headed for its best day in four weeks as Japanese and Australian shares rose while those in South Korea edged lower.
Benchmarks in China climbed, helped along by Caixin manufacturing data on Thursday that showed an expansion in activity, exceeding forecasts of a small contraction. The numbers followed official figures Wednesday that showed a further contraction in activity, weighing on the country’s equity markets.
For the Chinese economy “things are not getting worse outside of the growth momentum — but it’s not getting better,” Wendy Liu, chief Asia and China equity strategist for JPMorgan Chase & Co., said in an interview with Bloomberg Television. However, the economy will be “firmly in recovery in the second half,” she added.
US equity futures traded in and out of positive territory after an initial boost following news of the deal passing the House. The mixed picture suggests investors were taking more notice of Fed officials who backed the possibility of holding rates unchanged the next meeting.
Fed Governor Philip Jefferson said the central bank is inclined to keep interest rates steady in June to assess the economic outlook. His remarks were echoed by Philadelphia Fed President Patrick Harker, who said, “I think we can take a bit of a skip for a meeting.”
The S&P 500 closed 0.6% lower Wednesday, clinging to a small gain for May that marked three consecutive monthly advances. The Nasdaq 100 index fell 0.7%, weighed by a decline in Nvidia Corp. shares after a rapid rally that has nearly tripled the stock price this year.
Corporate earnings were again in focus. Shares in Salesforce Inc. tumbled around 6% in after-hours trading following a dim outlook for sales while Hewlett Packard Enterprise Co. fell 7.1% Wednesday on slimmer revenue projections than anticipated.
Treasuries sold off, largely reversing a Wednesday rally. Australian bond yields were moderately higher as were those for New Zealand. The dollar was in a tight range against most major currencies.
Hopes for a Fed pause were partly pared back after the JOLTS jobs report for April showed more than 10 million openings, the highest in three months and above consensus estimates.
Passage of the deal struck by House Speaker Kevin McCarthy and President Joe Biden means the bill will be sent to the Senate days before the June 5 default deadline.
Elsewhere, West Texas Intermediate and Brent crude futures rose after two days of declines. Gold was little changed.
Key events this week:
Eurozone HCOB Eurozone Manufacturing PMI, CPI, unemployment, Thursday
US construction spending, initial jobless claims, ISM Manufacturing, Thursday
ECB President Christine Lagarde speaks at conference, Thursday
Fed’s Patrick Harker speaks at webinar, Thursday
US unemployment, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 1:31 p.m. Tokyo time. The S&P 500 fell 0.6%
Nasdaq 100 futures fell 0.1%. The Nasdaq 100 fell 0.7%
Japan’s Topix rose 0.8%
Australia’s S&P/ASX 200 rose 0.4%
Hong Kong’s Hang Seng rose 0.8%
The Shanghai Composite rose 0.4%
Euro Stoxx 50 futures rose 0.7%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0691
The Japanese yen was little changed at 139.44 per dollar
The offshore yuan rose 0.1% to 7.1104 per dollar
The Australian dollar rose 0.2% to $0.6519
The British pound was unchanged at $1.2441
Cryptocurrencies
Bitcoin fell 1.3% to $26,773.34
Ether fell 0.7% to $1,853.7
Bonds
The yield on 10-year Treasuries advanced two basis points to 3.67%
Japan’s 10-year yield was little changed at 0.425%
Australia’s 10-year yield advanced four basis points to 3.64%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Joanna Ossinger.
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