Dollar eyes best week this year, Asia stocks climb

The dollar is poised for its biggest weekly gain this year as the US tax reform bill made encouraging progress and ahead of employment data that’s expected to show hiring remains robust in the world’s largest economy.

Asian stocks rose following a broad-based rally in US equities. Japan’s benchmarks advanced, buoyed by a weaker yen, which added to a 0.7% slide.

The Bloomberg dollar index looks like ending the week with a gain of more than 1% after the passage of the US tax bill through the Senate underpinned gains.

The pound held on to an advance on speculation that Ireland and Britain were close to a Brexit deal. Gold was steady after extending this week’s slide to a four-month low.

Equities across the Asia-Pacific began rallying on Thursday after an eight-day losing streak saw investors booking profits following 2017 gains. This year remains on track to be the best since 2009 when stocks surged in the immediate aftermath of the financial crisis.

“We’ve had a terrific year in financial assets across the board,” Kenneth Taubes, chief investment officer of US investment management at Amundi, which oversees about $1.6trn, told Bloomberg TV.

“As we get towards the end of the year and valuations seem more extended than there were last year, it’s pretty natural that people want to lock in some profits.”

Stocks in the US resumed their run-up tied to speculation that the U.S. tax overhaul will boost corporate profits. The S&P 500 Index ended a four-day losing streak, with industrial and consumer discretionary shares among the best performers. That follows a few days in which the markets drifted as investors awaited the details of a final bill. Meanwhile, Congress passed a two-week extension of federal funding that averts a government shutdown this week.

Investors are also watching whether British Prime Minister Minister Theresa May will be able to come up with concessions as she works against the clock to resolve the deadlocked Brexit talks. Read on how May is working against the clock here.

And the bitcoin frenzy continues. The cryptocurrency that has sparked so much debate went on a wild ride on Thursday. On Coinbase Inc.’s GDAX exchange, prices zoomed up to almost $20 000 from $16 000 in only about 90 minutes before crashing back down.

The largest digital currency is still up more than 16-fold this year. It was trading just below $17 000 in Asia.

Japan’s economy expanded in the third quarter more than initially reported, as business investment grew at a faster pace. Gross domestic product expanded an annualised 2.5%, beating an estimate 1.5%, and from a preliminary reading of 1.4%.

Elsewhere, Brazilian assets tumbled as the chances withered for an overhaul to the country’s pension system to be passed this year.

Here are some key events for the remainder of this week:

China reports on trade on Friday. US employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labour Department’s jobs report Friday may also show a bump up in average hourly earnings.

And these are the main moves in markets:

Stocks

The Topix index climbed 0.8 %as of 10:58am in Tokyo and the Nikkei 225 Stock Average rose 1.1%. Australia’s S&P/ASX 200 Index added 0.2%.

The Kospi index in Seoul was little changed. Hong Kong’s Hang Seng Index rose 0.5%.

The Shanghai Composite Index was up 0.1%. S&P 500 futures were little changed.

The cash measure rose 0.3%. The MSCI Asia Pacific Index gained 0.3% and is up about 24% so far this year.

Currencies

The Bloomberg Dollar Spot Index was up 0.1%. The yen fell 0.2 %to 113.30 per dollar. The euro edged lower to $1.1766. The pound held around $1.3467 after climbing 0.6%.

Bonds

The yield on 10-year Treasuries was steady at 2.37%. Australia’s 10-year yield climbed more than one basis point to 2.53%.  

Commodities

West Texas Intermediate crude was little changed at $56.60 a barrel. Gold was trading at $1 248.33 an ounce.