Asian stocks mixed ahead of United States data, yen steady

Marco Green
March 13, 2018

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US stock index futures were slightlyhigher on Tuesday ahead of the consumer prices data, which willprovide the last crucial reading on inflation in the run up to anear-certain interest rate hike by the Federal Reserve nextweek.

The S&P 500 and the Dow ended lower on Monday as the tariffssigned into law last week by President Donald Trump weighed onindustrials, though gains in tech stocks boosted the Nasdaq.

Japanese and Hong Kong equities drifted, while Australian shares fell and South Korea and Shanghai stocks were little changed. The Treasury 10-year yield inched up to 2.88 percent after Monday's auction broadly met expectations.

The pullback in wages tempered speculation the Federal Reserve would project four rate hikes - or dot plots - at its policy meeting next week, instead of the current three. A figure that misses or meets estimates is likely to reaffirm the case for just three rate hikes this year and give the green light to fresh appetite for risk assets.

Politics also remain in focus after President Donald Trump issued an executive order blocking Broadcom from acquiring Qualcomm, scuttling a $117bn hostile takeover that had been subject of scrutiny over the deal's threat to USA national security.

"In reality though the market is probably reading too much into a single jobs report", they cautioned."A fourth dot on March 21 may have been averted but the labour market is increasingly demonstrating evidence of tightness and this will inevitably translate into upside wage pressure".

West Texas Intermediate crude held onto losses after decreasing 1.1%, to trade at $61.23 a barrel. Bitcoin was fractionally higher, holding above $9,000.

Investors are looking to American inflation and retail sales data followed by reports on Chinese industrial production, retail sales and fixed-asset investment to provide direction for markets this week. The selloff came on the back of strong USA wage numbers, which investors feared might feed into inflation and push the US central bank towards a faster pace of monetary tightening.

In commodities, crude oil prices staged a recovery after sliding on concerns over rising USA output.

South Korea's Kospi index was flat.

Futures on the S&P 500 Index gained 0.2 percent to the highest in nearly six weeks.

Japan's Topix index slid 0.1 percent as of 10:41 a.m.in Tokyo.

The U.K.'s FTSE 100 Index fell less than 0.05 percent.

MSCI's world equity index .MIWD00000PUS hit a two-week high on Monday, while Hong Kong's Hang Seng Index closed up 1.93 percent.

The dollar edged ahead on the yen to 106.88, having bounced 0.5 percent on Friday. The euro was last up a fraction at $1.2310, sandwiched between support at $1.2270 and resistance at $1.2296.

The British pound dipped 0.1 percent to $1.3898.

Spot gold fell 0.2 per cent to $1,318 per ounce.

Inflationary worries faded on Friday after USA data showed nonfarm payrolls jumped by 313,000 jobs last month, but annual growth in average hourly earnings slowed to 2.6 percent after a spike in January.

Slovakia's 10-year bond yield rose as much as five basis points and the cost of insuring exposure to its debt hit the highest in nearly three months as the country's government inched towards collapse.

The benchmark 10-year U.

US crude was last at $61.37, down 1.08 percent.

To contact the reporter on this story: Samuel Potter in London at spotter33@bloomberg.net.

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