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Stocks climb as Japan data spur growth optimism

Apr 20 2017 08:59
Bloomberg: Adam Haigh

Sydney - Asian stock markets climbed as oil recovered some of its slump and better-than-forecast trade figures in Japan boosted optimism in the global economy. The kiwi dollar surged as inflation in New Zealand accelerated more than forecast.

Japan’s Topix headed for its first weekly gain in more than a month. Australian equities also climbed and Hong Kong shares halted a three-day retreat. Futures on the S&P 500 Index ticked higher after a rout in crude dragged US shares lower, as the plunge in oil eased Thursday. The kiwi climbed after New Zealand inflation reached the central bank’s target for the first time in more than five years.

Japanese exports grew at the fastest rate in more than two years in March, supporting the bullish view in the debate over the health of the global economy.

The Federal Reserve’s Beige Book report showed the US economy continued to expand steadily and Fed Vice chairperson Stanley Fischer painted a picture of brightening global growth that can better withstand gradual monetary tightening. BlackRock boss Laurence D. Fink said lackluster growth in the American economy and uncertainty around the Trump administration’s ability to quickly pass key reforms pose a risk to markets.

Ahead of the first round of voting in France’s presidential election this weekend, polling is suggesting it will be a close call. Every poll for the past month has shown independent Emmanuel Macron and the National Front’s Marine Le Pen taking the top two spots. Macron would then easily win the May 7 runoff, polls show.

Yet both front-runners have been steadily slipping over the past two weeks, and Republican Francois Fillon and Communist-backed Jean-Luc Melenchon are now within striking distance.

Upcoming events that investors will be watching:

US Vice President Mike Pence continues his Asia-Pacific trip with a stop in Jakarta.  Indonesia’s central bank decision is due on Thursday. Here’s a guide. The first round of voting in the French election is on Sunday and the two leading candidates will run off in a winner-takes-all contest on May 7.

Here are the main moves in markets:

Stocks 

Japan’s Topix index added 0.4% as of 07:11, bringing its weekly gain to 1.2%. The Hang Seng advanced 0.5%, Australia’s S&P/ASX 200 Index climbed 0.3% and South Korea’s Kospi index was up 0.4%.

The Shanghai Composite was little changed, after four days of losses brought it to the lowest level since February 8. S&P 500 futures rose less than 0.1%. The underlying gauge slid 0.2% on Wednesday.

Currencies

The yen slipped 0.1% to ¥108.94/$, following a 0.4% decline on Wednesday. The kiwi rose 0.5% to 70.36 US cents. The Aussie rose 0.1% to 75.06c after a 0.8% slide on Wednesday. The Bloomberg Dollar Spot Index fell less than 0.1% after rising 0.5% on Wednesday.

Bonds

The yield on 10-year Treasuries slid one basis point to 2.20 after a five basis point advance on Wednesday. Australian government bond yields with a similar maturity added five basis points to 2.50%.

Commodities

Oil added 0.1% to $50.51 a barrel, after tumbling 3.8% on Wednesday when a report showed US gasoline supplies increased for the first time since February, while crude output keeps rising. Gold fell 0.1% to $1 278.88 an ounce.

Copper rose 0.3%, climbing from the lowest level since early January as Rio Tinto reported lower-than-expected production in the first quarter and reduced its full-year guidance by as much as 25% amid disruptions at top two mines. Iron ore futures fell 3%, resuming a selloff after rallying 2.6% on Wednesday.

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equities  |  markets  |  global markets

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