(Bloomberg) – The dollar strengthens and equities are likely to face downside pressure as markets open in Asia on Monday on news of increased unrest in China due to restrictions mechanism of Covid-19.
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The greenback posted some of the biggest early gains against the Australian and South African currencies, both of which trade with China. The offshore yuan fell about 0.5%.
Hong Kong and Australian stock futures were headed for declines even before the protests worsened over the weekend. Contracts of Japanese shares rose earlier.
Treasuries could find bid support on safe-havens, though moves could be complicated on Thursday in the US, followed by short trading on Friday. The yield on the benchmark 10-year forward fell to 3.68% on Friday.
Yields on Australian and New Zealand government bonds rose.
Oil, which lost its third week, could also face headwinds as the demand picture from China deteriorates.
The upbeat mood emanating from China contrasted with a surge in sentiment in global markets last week after the minutes of the Federal Reserve’s November 1-2 meeting showed most officials in households slow down the rate of interest rate increase. Since the Fed’s most recent meeting, investors have analyzed a slew of economic data that has helped ease concerns about inflation somewhat, reinforcing the possibility of smaller rate hikes.
The S&P 500 recorded a weekly gain of 1.5%, taking the index to its highest level since early September. The Nasdaq 100 also posted gains for the week.
All eyes will be on this week’s US jobs report and Fed Chairman Jerome Powell and New York Fed President John Williams, who are among central bank officials scheduled to speak.
Amid challenges in China, the country’s central bank on Friday cut the amount of cash that lenders must hold in reserve for the second time this year, an escalation that supports a growing economy. The economy is being weighed down by the containment of Covid.
This week’s main events:
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Fed’s John Williams Speaks, Monday
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Fed’s James Bullard MarketWatch Interview, Monday
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Christine Lagarde of the ECB speaking to the European Parliament committee, Monday
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Euro Area Economic Confidence, Consumer Confidence, Tuesday
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US Council Consumer Confidence, Tuesday
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EIA Crude Oil Inventory Report, Wednesday
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China PMI, Wednesday
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Speech by Fed Chair Jerome Powell, Fed’s Michelle Bowman Lisa Cook Speaks Wednesday
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Fed releases Beige Book on Wednesday
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US Wholesale Inventories, GDP, Wednesday
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S&P Global PMI, Thursday
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US Construction Spending, Consumer Income, Initial Jobless Claims, ISM Manufacturing, Thursday
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Fed’s Lorie Logan, Michelle Bowman, Michael Barr to speak on Thursday
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BOJ’s Haruhiko Kuroda speaks on Thursday
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US unemployment rate, nonfarm payrolls, Friday
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Fed’s Charles Evans speaks on Friday
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Christine Lagarde of the ECB speaking on Friday
Some key market moves at 7:27 a.m. Tokyo time:
share
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S&P 500 was little changed on Friday while Nasdaq 100 fell 0.7%
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Nikkei 225 futures rose 0.2%
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Australia’s S&P/ASX 200 Index Futures Drop 0.1%
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Hang Seng index futures fell 0.5%
currency
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The euro fell 0.2% to $1.0377
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The Japanese yen was little changed at 139.27 per dollar
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The offshore yuan fell 0.5% to 7.2322 to the dollar
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Australian Dollar down 0.4% to $0.6723
electronic money
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Bitcoin is little changed at $16,569.74
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Ether is little changed at $1,215.37
bonds
Goods
This story was made possible with support from Bloomberg Automation.
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