(Bloomberg) — Most Asian equity markets fell amid caution ahead of next week's U.S. election and Federal Reserve rate decision. Japanese share gains.
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Benchmarks in mainland China, Hong Kong and Australia fell at least 0.5%. The Topix and Nikkei indexes rose about 1%, boosted by recent yen weakness and gains in the technology sector after the Nasdaq Composite closed at an overnight record. US equity futures advanced in Asian hours after the S&P 500 rose 0.2%.
Treasury yields fell, while a Bloomberg gauge of dollar strength snapped a three-day advance. Gold hit a new record high early on Wednesday as traders braced for possible market disruption ahead of the election. Bitcoin, seen as a Trump trade, is nearing all-time highs.
In addition to risks posed by US events, traders in Asia are eyeing the Bank of Japan's decision on Thursday and a meeting of China's top legislature on November 4-8, where more monetary stimulus may be announced. Asia's regional equity benchmark is set for its worst monthly performance in a year.
Billy Leung, investment strategist at Global X ETF, said US earnings had some positives but were still insufficient to offset market direction or uncertainty related to the election and the Fed. “I think the market is unlikely to take big trades or bets ahead of the NPC,” he added, referring to China's National People's Congress Standing Committee meeting.
In late US trading, Alphabet Inc. Google rose more than 5% as it beat its parent's earnings estimate, while Advanced Micro Devices Inc. A weaker revenue fell 7% amid forecasts
Just a week away from the Fed's decision, data showed US job openings fell to the lowest since early 2021. The figures run counter to September's employment report that pointed to a still-strong labor market, prompting businesses to bet on another big rate cut. A separate reading showed consumer confidence at its highest since the start of the year.
Investors are now turning to three high-profile reports from the US, which are set to show underlying resilience in the economy and a temporary hiccup in job growth. Forecasts call for a solid 3% annual pace for gross domestic product to match the growth seen in the previous three months.
Treasuries are on track for their worst month in more than two years amid signs of economic strength, election looming and a heavy supply of new notes and bonds. Oil prices rose on Wednesday after losing more than 6% in the previous two sessions on easing concerns that the conflict in the Middle East would affect supplies.
Back in Asia, China is in the spotlight as Reuters reports authorities are weighing authorizing 10 trillion yuan ($1.4 trillion) in additional borrowing to bolster the economy and tackle local government debt risks in the coming years.
“China's latest stimulus package appears to be underwhelming,” said Charu Chanana, chief investment strategist at Saxo Markets. “Foreign investors are still very concerned about potential tariff threats if the US election results next week result in a Republican sweep.”
Australia's core inflation was elevated last quarter, reinforcing the Reserve Bank's view that price pressures will take time to dissipate. The Aussie dollar fluctuated on the results.
This week's highlights:
Eurozone consumer confidence, GDP, Wednesday
US GDP, ADP Employment, Pending Home Sales, Wednesday
Meta Platform, Microsoft Earnings, Wednesday
The US Treasury Department announced the quarterly return of the bond-auction plan on Wednesday
China Manufacturing and Non-Manufacturing PMIs, Thursday
Bank of Japan rate decision, Thursday
Eurozone CPI, unemployment, Thursday
US personal income, consumption and PCE inflation data, preliminary jobless claims, Thursday
Amazon, Apple earnings, Thursday
China Caixin manufacturing PMI, Friday
US Employment, ISM Manufacturing, Friday
Some of the main rice in the market:
stock
S&P 500 futures rose 0.1% as of 1:08 pm Tokyo time.
Nikkei 225 futures (OSE) rose 1%
Japan's Topix rose 1%
Australia's S&P/ASX 200 fell 0.9%
Hong Kong's Hang Seng fell 1.9%
The Shanghai Composite fell 0.9%
Euro Stoxx 50 futures fell 0.3%
currency
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0814
The Japanese yen was little changed at 153.37 per dollar
The offshore yuan was down 0.1% at 7.1508 per dollar
The Australian dollar fell 0.3% to $0.6540
Cryptocurrency
Bitcoin fell 0.1% to $72,236.66
Ether rose 0.8% to $2,641.87
bond
The yield on 10-year Treasuries was little changed at 4.25%
Japan's 10-year yield fell one basis point to 0.960%
Australia's 10-year yield rose two basis points to 4.46%
merchandise
West Texas Intermediate crude rose 0.6% to $67.64 a barrel
Spot gold rose 0.2% to $2,779.04 an ounce
This story was produced with the help of Bloomberg Automation.
