The MSCI All Country World Index rose a seventh day as figures showed China’s economy maintained momentum last quarter, enhancing the allure of stocks after soft U.S. consumer price data reinforced the need for gradual tightening by the Federal Reserve. Chinese shares were hit by concern that policies to reduce leverage in Asia’s biggest economy will curb earnings. The kiwi sank after the deputy governor of New Zealand’s central bank said a lower currency would help rebalance growth. Japanese markets were closed for Marine Day, according to Bloomberg.
South Korea’s Kospi Index was also at an all-time high. Futures on the U.K.’s FTSE 100 Index indicated gains at the start of London trading. The U.S. dollar remained close to the lowest since September, with speculators holding on to the most bearish positions on the greenback since 2013. Earnings season ramps up this week with Microsoft Corp. and Unilever among those set to report.
China’s economy expanded 6.9 percent in the second quarter from a year earlier, matching the previous period and exceeding the 6.8 percent median estimate in a Bloomberg survey. “All numbers suggest that the economy has stabilized,” Citigroup Inc.’s chief China economist Liu Li-Gang said in a Bloomberg TV interview.
On the radar this week:
- The European Central Bank meets Thursday. Bloomberg Intelligence expects no change then, and no rate hike before 2019. Reuters cited unidentified officials as saying the bank is keen to keep asset purchases open-ended.
- The Bank of Japan is forecast to stand pat at its meeting Thursday.
- Round 2 of Brexit talks get underway in Brussels.
- Australia’s central bank on Tuesday releases minutes of its July 4 gathering. Government data on the labor market is due Thursday.
Here are the main moves in markets:
Stocks
- The MSCI ACWI Index of emerging and developed markets was up 0.1 percent at 1:50 p.m. in Hong Kong, while the MSCI Asia Pacific Index advanced 0.3 percent, extending last week’s 3.1 percent surge.
- South Korea’s Kospi rose 0.4 percent and Hong Kong’s Hang Seng Index climbed 0.6 percent. Australia’s S&P/ASX 200 was down 0.2 percent.
- The Shanghai Composite Index was down 0.7 percent after falling as much as 2.6 percent. Chinese shares were hit on concerns over the implications of a weekend meeting where President Xi Jinping said the central bank would play a greater role in defending against risks. See more here.
- Futures on the FTSE 100 Index advanced 0.4 percent and contracts on the S&P 500 Index were little changed.
Currencies and bonds
- The yen slid 0.1 percent to 112.64 per dollar after climbing 1.2 percent last week. The Bloomberg Dollar Spot Index was up 0.1 percent Monday.
- The Korean won was the strongest major Asian currency, rising 0.5 percent. It is the region’s best performer year-to-date, climbing 7.1 percent versus the greenback.
- The Aussie and kiwi both declined 0.2 percent. The pound and euro were off 0.1 percent.
- Treasury futures were little changed after the 10-year yield dropped five basis points last week to 2.33 percent.
Commodities
- West Texas Intermediate crude advanced 0.3 percent to $46.66 a barrel, heading for a sixth day of gains.
- Gold rose 0.2 percent to $1,231.17 an ounce. Copper climbed 0.6 percent to $5,960 per metric ton.