Japanese equities nudged higher after a report showed an improving outlook among the countries’ largest firms. Stocks in South Korea, Hong Kong and Singapore also rose, after the best quarter for the region’s equities in five years. The euro climbed, after posting its first weekly decline since February. Markets in China and Taiwan are closed for holidays. Oil held last week’s biggest gain of the year, according to Bloomberg.
As the second quarter gets going, political developments threaten to cloud the improving global economic outlook. The first major data release showed confidence among Japan’s large manufacturers improved for a second consecutive quarter in the first three months of the year.
Last month’s Federal Reserve interest-rate increase and the prospect of tighter monetary policy later this year has failed to spur the greenback, which fell to a four-month low last month on concern President Donald Trump may struggle to steer his promised tax cuts through Congress.
“Investors will look to the economic data and minutes out from both the FOMC and ECB in the week ahead for the next clues,” said Michala Marcussen, Paris-based global head of economics at Societe Generale SA. “When it comes to risk sentiment, however, markets are likely to take their cue from the two-day meeting between President Xi and President Trump starting on Thursday in Florida with the U.S.-China trade deficit at the top of the agenda.”
What investors will be watching this week:
- The RBA is projected to keep rates steady on Tuesday. Australian trade data due earlier may give guidance to the debate between the need to restrain currency strength and damping runaway east-coast property prices.
- India’s central bank will probably also hold rates. Inflation numbers are due from Thailand, South Korea and the Philippines.
- Fed speakers include New York’s Bill Dudley and Governor Daniel Tarullo. Minutes from the March meeting should put their comments into perspective, with minutes also due from the European Central Bank’s latest gathering.
- China’s President Xi Jinping is due to meet U.S. President Donald Trump.
- That’s all prior to the big data event of this week: U.S. non-farm payrolls on Friday.
Here are the main moves in markets:
Stocks
- The MSCI Asia Pacific Index climbed 0.3 percent as of 10:56 a.m. in Tokyo, after soaring 8.8 percent in the first quarter, the best performance since 2012.
- The Topix index added 0.3 percent and Australia’s S&P/ASX 200 Index was little changed. Hong Kong’s Hang Seng advanced 0.5 percent, while South Korea’s Kospi index added 0.3 percent.
- Futures on the S&P 500 fell 0.1 percent, after the underlying gauge dropped 0.2 percent on Friday. The Stoxx Europe 600 Index rose 0.2 percent.
Currencies
- The yen was up less than 0.1 percent at 111.35 per dollar. The euro rose 0.2 percent to $1.0677.
Bonds
- The yield on 10-year Treasuries rose less than one basis point to 2.40, after dropping three basis points Friday.
Commodities
- WTI crude was little changed on Monday at $50.61 a barrel, after the biggest weekly gain of the year. Crude stockpiles are starting to decline in a sign that the production cuts implemented this year are bringing the market to balance, according to OPEC’s Secretary-General Mohammad Barkindo.
- Gold was flat at $1,248.20 per ounce. The metal has alternated between gains and losses for the past six days.