After a choppy session on Wall Street and ahead of a slew of Chinese economic data, Asian stocks opened slightly higher Tuesday.
In Japan and South Korea, the shares went up, while Australian equities declined. The futures indicated gains for Hong Kong. Contracts for the S&P 500 and the tech-heavy Nasdaq 100 went up in Asia after both indexes fell around 1% Monday, snapping a two-day rally.
The dollar and Treasury yields held their advance, with the 10 year rate around 3.87% after Federal Reserve speakers highlighted the resolve to be persistent until inflation heads back to levels consistent with the 2% target. Fed Vice Chair Lael Brainard buoyed sentiment after she said it would be appropriate soon to slow the pace of interest-rate hikes.
The medium-term lending facility rate, retail sales and industrial production, as well as the key indicators of China will continue to loom large for sentiment in Asia.
Chinese stocks in the US extended their rally to a third day after Joe Biden and Xi Jinping called for a reduction in tension between the world's two biggest economies at a meeting in Bali, Indonesia.
The Hang Seng China Enterprises Index has risen more than 20% from a low on October 31, meeting the common definition of a technical bull market. The easing of some virus controls and the sweeping measures to support the property market have given traders confidence that Beijing is finally taking action to deal with the two biggest sore points for the economy and markets.
Kristina Hooper, chief global market strategist at Invesco, said on Bloomberg Radio that it was a time to think about a recovery regime unfolding for markets. It's going to take a little time before we know if this is a turning point for inflation and the Fed. Higher borrowing costs are a major problem for the global economy, despite the positive signs in Asia and indications of moderate inflation in the US.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said that investors should take a defensive position because of the cumulative impact of previous interest-rate hikes.
The yen was trading around 140 against the dollar on Tuesday, having strengthened from the 150 level seen in October.
Oil extended losses because concerns over the near-term demand outlook overshadowed signs of tightening supply heading into winter.
3% to 140.26 per dollar.
The story was produced with the help of Bloomberg Automation.
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