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Asia Stocks Rise as Earnings Awaited, Won Weakens: Markets Wrap

Asian equities edged higher ahead of the start of the region’s earnings season this week, with investors betting that the outlook for economic growth and profits is strong enough to support record-high stock prices. The Korean won fell.

Shares from Sydney to Seoul climbed with markets in Tokyo closed Monday for a holiday. Samsung Electronics Co. and a slew of Japanese retailers and manufacturers are among companies giving profit updates this week. South Korea’s currency reversed gains as authorities said they would take action to stem one-sided moves in the won. Oil rose, and the euro built on last week’s advance.

January Effect on Target in 2018

The S&P 500 usually starts strong, but recent history is mixed and stocks are at highs

Source: Bloomberg

With risk assets enjoying a strong start to 2018, profit results in Asia may dictate the next move for the region’s equity markets. The S&P 500 Index posted its best week since December 2016 as investors looked past weaker-than-forecast jobs figures, speculating that Republican tax cuts will lead to higher corporate earnings. Inflation reports in the U.S. and China are due this week, and a host of addresses from U.S. policymakers may provide detail on the pace of monetary policy tightening in America.

Here are the main events to watch for this week:

  • U.S. inflation data will probably show price pressures remain muted, giving hawks little reason to argue for faster tightening.
  • San Francisco Fed President John Williams and head of the New York Fed Bill Dudley are among policy makers scheduled to speak. 
  • North Korea and South Korea are slated to hold talks Tuesday for the first time since 2015.
  • China producer and consumer prices data is due Wednesday, while a reading on the country’s money supply is expected in coming days.
  • A U.K. cabinet reshuffle is coming soon, Prime Minister Theresa May said on Sunday. Her comments coincided with newspaper reports that she is planning a major cull of senior figures as soon as Monday to promote fresher faces from a younger and more diverse generation of Conservatives.
  • U.S. firms announcing earnings this week include JPMorgan Chase & Co., Wells Fargo & Co. and BlackRock Inc.

Terminal users can read more in our markets blog.

These are the main moves in markets:

Stocks

  • Hong Kong’s Hang Seng index fluctuated as of 10:10 a.m. in Hong Kong.
  • Australia’s S&P/ASX 200 Index added 0.1 percent and South Korea’s Kospi index advanced 0.3 percent. 
  • Gauges in Taiwan, Singapore and Malaysia also rose, while most mainland Chinese shares retreated.
  • Futures on the S&P 500 Index were up 0.1 percent.
  • The S&P 500 and MSCI All Country World Index both rose 0.7 percent on Friday, closing at record highs.

Currencies

  • The won slid 0.3 percent, reversing earlier gains. South Korea will take steps "sternly" in case of one-sided moves in the won, said an official at the nation’s FX authority, who asked not to be identified because of internal policy.
  • The yen slipped 0.1 percent to 113.12 per dollar.
  • The Bloomberg Dollar Spot Index was flat after four weeks of losses. 
  • The kiwi rose 0.1 percent to 71.83 U.S. cents.
  • The euro climbed 0.1 percent to $1.2046.
  • The pound added 0.1 percent to $1.3582.

Bonds

  • The yield on 10-year Treasuries increased two basis points to 2.48 percent Friday.
  • Australia’s 10-year yield was little changed at 2.64 percent.

Commodities

  • West Texas Intermediate crude climbed 0.3 percent to $61.60 a barrel, after slipping on Friday.
  • Gold added 0.1 percent to $1,321.04 an ounce following last week’s advance.

    Read more: http://www.bloomberg.com/news/articles/2018-01-07/asia-stocks-point-higher-as-earnings-season-begins-markets-wrap

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