Publications
Partners
Stocks in most Asian markets followed gains in US equities and the dollar climbed to a three-month high as earnings and congressional action on tax reform boosted confidence in the growth outlook.
Australian assets took a hit after the government lost its majority.
Japan’s equity benchmarks rose as the yen weakened and technology shares rallied following stellar profit at Amazon.com and Alphabet that buoyed futures on the Nasdaq 100 Stock Index.
Shares also advanced in Hong Kong and Seoul with US equity-index futures. Results from Twitter and Ford Motor topped estimates, showing strength in the American economy ahead of the first reading on gross domestic product for the third quarter.
The Aussie dollar plunged to the lowest since July and stocks declined after the nation’s high court ruled Deputy Prime Minister Barnaby Joyce is ineligible to remain in parliament as he was also a citizen of New Zealand when elected, violating constitutional laws.
That means Prime Minister Malcolm Turnbull’s Liberal-National coalition government loses one-seat majority in the lower house of parliament.
The dollar extended gains with the Bloomberg dollar spot index headed for its sixth weekly advance in seven after the US House passed a budget resolution seen as advancing the prospects for tax reform.
The British pound declined after Andreas Dombret, Bundesbank board member for banking supervision, wrote in Focus magazine that a “hard Brexit would be economically manageable."
The euro fell further. European Central Bank President Mario Draghi outlined plans to halve its monthly bond purchases to €30bn from €60bn starting in January, but he also indicated that zero percent interest rates could remain at current levels until "well past" whenever it finally decides to end its quantitative easing measures.
Brent oil held near the highest level in more than two years after Saudi Arabia’s Crown Prince backed the extension of Opec-led output cuts.
The MSCI Asia Pacific Index advanced and is set to finish its fourth week of gains, though volatility is at record lows. In the last 60 trading days it has dropped below 6% to the lowest since Bloomberg started compiling the data in 1988.
In the US, House Republicans adopted a budget resolution unlocking a process to cut taxes by the end of the year. President Donald Trump continued to string out his decision on the next Federal Reserve leader, giving mixed signals on his preference.
These are some of the remaining events on the slate for this week:
Japan’s inflation remained unchanged in September, underscoring the challenge facing the Bank of Japan ahead of a policy meeting next week. The advance reading on US third-quarter GDP is due Friday morning in Washington. Economists surveyed by Bloomberg expect growth of 2.6%.
President Donald Trump has said he’ll reveal his choice to lead the Fed by November 3. The Fed’s next rate decision is on November 1, with economists expecting the central bank to keep rates at 1.25% and to increase them at the December meeting.
And here are the main moves in markets:
Stocks
Japan’s Topix index rose 0.9% as of 2:06pm in Tokyo. The Nikkei 225 Stock Average added 1.1%. Both are headed for their seventh weekly advance.
Australia’s S&P/ASX 200 Index declined 0.4% at the close of trading for its first weekly slide in four.
South Korea’s Kospi index climbed 0.6%. Hong Kong’s Hang Seng Index gained 0.9%, while the Shanghai Composite Index was up 0.3%.
Futures on the Nasdaq 100 rose 0.3% in the final minutes of Thursday trading after the tech giants reported results. They added 0.3% during Asian trading. S&P 500 Index contracts rose 0.1%.
The underlying index climbed 0.1% on Thursday and the Dow Jones Industrial Average rose 0.3%.
Currencies
The Bloomberg Dollar Spot Index rose 0.1% after increasing 0.7% on Thursday. It’s on track for a 1% gain this week. The yen fell 0.2% to 114.16 per dollar. The euro lost 0.1% to $1.1635 after dropping 1.4% on Thursday.
The Aussie tumbled 0.3% to 76.41 US cents. The pound slid 0.3% to $1.3126.
Bonds
The yield on 10-year Treasuries was steady at 2.46%. Yields increased three basis points Thursday. Australia’s 10-year yield rose three basis points to 2.78%.
Commodities
West Texas Intermediate crude was steady at $52.62 a barrel, the highest since April. Brent was at $59.37, holding at the highest since July 2015, after jumping 1.5% on Thursday when Saudi Arabia’s Crown Prince Mohammed bin Salman said that "of course" he wanted to prolong the Opec curbs beyond the end of March 2018.
Gold was at $1 267.58 an ounce after it dipped 0.8% in the previous session.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
