Asian stocks dropped, and US equity futures decreased as the rate of growth in Chinese industrial profits slowed, dampening hopes following last week’s rally. The yen surged against all major currencies, with China shares leading the dip. Data revealed that profits at the nation’s industrial companies grew at a slower pace, signaling lingering uncertainty in the economic recovery. Benchmarks in Australia and Japan also took a hit.
Amidst uncertainty, global economic data due this week including euro-zone inflation figures, China PMIs, and US personal consumption numbers, are anticipated. Market activity faltered with little direction from the US following the abbreviated post-Thanksgiving session on Friday.
US bond yields increased at the market open, leading to a downturn in equity sentiment and a slide in US futures, while Chinese markets were already under pressure due to weak industrial profits. Analysts indicate that the fragile recovery momentum may keep companies cautious about expansion and hiring, adding pressure on prices.
Investors are closely monitoring Chinese activity data this week to gauge the health of the world’s second-largest economy. Traders are also assessing the impact of Chinese authorities opening criminal investigations into the money management of a major Chinese company. In Hong Kong, interbank offered rates rose to the highest level in over a decade as cash supply tightened.
Treasury 10-year yields rose to a one-week high, with the dollar mixed in Asian trade after a modest decline last week. The US currency may continue to remain under pressure as fund managers adjust hedges and cash flows into developing economies. Earnings reports due include cybersecurity company Crowdstrike Holdings Inc., Salesforce Inc., and Dell Technologies Inc.
Traders will also track gold and oil after indicators that a temporary cease-fire in Gaza could be extended, while oil is expected to see a risk-off tone. Additionally, key events this week include appearances by European Central Bank President Christine Lagarde in a parliamentary committee and a meeting of NATO foreign ministers.
Regarding market movements, stocks, currencies, cryptocurrencies, bonds, and commodities all showed varied changes. This story was produced with the assistance of Bloomberg Automation.
