Asian equities were mostly up as investors shrugged off Monday’s declines in the U.S., where a gauge of equity volatility climbed as market participants assessed the recent rally in global stocks before a slew of earnings reports. The dollar was steady while the yen hovered near a three-month low.
Japan’s Nikkei 225 Stock Average continued its gains after a 15-day rally that lifted it to the highest level since 1996 after the S&P 500 Index and Dow Jones Industrial Average both fell Monday, pulled down by technology and industrial stocks. Shares in Hong Kong were lower. The euro remained weaker as Catalan separatists planned their response to Spain Prime Minister Mariano Rajoy’s moves to stamp his authority on the region. In China, all eyes turn to the succession plan for President Xi Jinping as the Party Congress wraps up Wednesday.
“These markets are tired, fatigued and need new information to fuel the beast,” said Chris Weston, chief market strategist at IG Ltd., in Melbourne.
Monday’s declines in U.S. shares are just a small dent to the stellar run for global equities in recent months. The MSCI All-Country World Index is up 17 percent this year and last week reached a record high amid optimism for global growth. While the market waits for more news on the Federal Reserve leadership succession and the U.S. budget, this week will also see decisions from the Bank of Canada, Norges Bank, Riksbank and the European Central Bank. President Donald Trump said Monday he’s “very, very close” to announcing his Fed chair nominee.
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These are some of the key events coming up:
- Market focus on Thursday’s ECB meeting is intensifying. The ECB is expected to offer more insight into its plans for tapering the QE program that is currently set to continue until the end of 2017. Expectations center on a nine-month extension of the program at perhaps half the current monthly pace of 60 billion euros. ECB officials have acknowledged that stimulus is still required to nurture inflation and that interest rates will remain “at or below” current levels for the foreseeable future
- The U.S. economy probably expanded at about a 2.5 percent annualized pace in the third quarter, restrained in part by the effects of two hurricanes, economists forecast the government to report on Friday.
- Among other U.S. data this week, orders for big-ticket durable goods probably increased in a sign of firmer manufacturing growth.
- Australia updates on third-quarter inflation on Wednesday, while South Korea reports on GDP and Hong Kong on imports and exports. Japan reports on CPI later in the week.
- Companies reporting earnings this week include Alphabet Inc., Microsoft Corp. and Twitter Inc. in the technology sector. Ford Motor Co., Volkswagen AG and Boeing Co. headline cars and planes. Fast food giant McDonald’s Corp., Coca-Cola Co. and brewer Heineken NV join European banks including UBS Group AG, Deutsche Bank AG and Barclays Plc.
And here are the main moves in markets:
- Japan’s Topix index was up 0.4 percent as of 11:10 a.m. in Tokyo. The Nikkei 225 rose 0.2 percent. Australia’s S&P/ASX 200 Index was up 0.2 percent and South Korea’s Kospi index climbed 0.1 percent.
- Hong Kong’s Hang Seng Index was little changed and the Shanghai Composite Index was up 0.1 percent.
- Futures on the S&P 500 Index were flat. The underlying gauge fell 0.4 percent Monday, the biggest decrease in almost seven weeks. The Dow declined 0.2 percent.
- The CBOE VIX index jumped 11 percent, the most since Sept. 5.
- The Bloomberg Dollar Spot Index was little changed after climbing to its highest in more than 14 weeks on Monday.
- The euro traded at $1.1762 after falling 0.3 percent Monday.
- The Australian dollar was little changed and bought 78.17 U.S. cents.
- Yields on 10-year Treasuries were at 2.36 percent, down 2 basis points so far this week.
- Australian 10-year yields slid three basis points to 2.76 percent.
- Gold traded at $1,281.71 an ounce.
- West Texas Intermediate crude was little changed at $51.90 a barrel.