Stocks Rally Into Turbulent Month’s End; Bonds Dip: Markets Wrap

Stock markets in Asia advanced on the last day of what is shaping up as the worst month for global stocks in more than six years. The dollar edged higher with Treasury yields.

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Shares in Tokyo outperformed, alongside gains in Hong Kong and China, while Australia and South Korea reversed losses as U.S. S&P 500 Index futures advanced. Earlier, the S&P 500 twice erased gains that topped 1 percent before finally securing a rebound in the last hour of trading. China’s overnight repo rate surged the most in more than four years as authorities take steps to combat bets against the yuan, which held near the weakest level in a decade against the greenback.

The latest rally will be welcomed by bulls who’ve been hammered this month after a wipeout of about $ 8 trillion from global equities. The MSCI All-Country World Index has declined 8.7 percent this month. Attention remains on earnings ahead of results from Apple (AAPL). on Thursday and Friday’s U.S. jobs report. Trade also remains in focus, while the American midterm elections on Nov. 6 have started creeping into the calculus.

China’s overnight repo rate — the cost of lending from the central bank to commercial banks — soared 80 basis points, the most since January 2014, to 2.34 percent. Efforts to stem trades that would benefit if the yuan weakens further remain under scrutiny after the currency touched the weakest level since May 2008 amid signs that the trade war with the U.S. may escalate.

The Bank of Japan left its monetary stimulus unchanged and kept its 10-year bond yield target at about zero percent as it updated price forecasts that confirm it won’t meet its inflation target for years to come.

Elsewhere, Australia’s dollar declined a weaker than expected inflation reading and as a closely watched gauge of China’s economy showed worsening manufacturing activity from the trade war with the U.S. The Indian rupee had the biggest drop among Asian currencies on speculation of a widening rift between the government and central bank. Gold declined and oil traded near a two-month low.

Here are some key events coming up this week:

This week’s earnings season highlights : Macquarie (MIC), Apple, Alibaba (BABA), Airbus (EADSY), Credit Suisse (CS), Exxon Mobil (XOM), and Shell (SHLX). A monetary policy decision is due in the U.K. On Friday, the final U.S. jobs report before the November midterm elections may show hiring improved as payrolls rose about 190,000, and the unemployment rate held at a 48-year low of 3.7 percent, analysts forecast.

And these are the main moves in markets:

Stocks

Japan’s Topix index rose 2.2 percent at the 3 p.m. close in Tokyo. Hong Kong’s Hang Seng advanced 1.1 percent. Australia’s S&P/ASX 200 index rose 0.4 percent. Shanghai Composite Index added 1.4 percent. S&P 500 futures gained 0.4 percent. The S&P 500 Index rose 1.6 percent. The MSCI Asia Pacific Index climbed 1.2 percent.

Currencies

The yen dipped 0.1 percent to 113.28 per dollar after dropping 0.7 percent. The offshore yuan was steady at 6.9749 per dollar. The Bloomberg Dollar Spot Index ticked higher to trade at the highest since May 2017. The euro bought $ 1.1343.

Bonds

The yield on 10-year Treasuries increased two basis points to 3.14 percent. Australia’s 10-year bond yield rose five basis points to 2.63 percent.

Commodities

West Texas Intermediate crude added 0.5 percent to $ 66.50 a barrel. Gold slipped 0.4 percent to $ 1,218.08 an ounce.

News – Investor’s Business Daily

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