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Asian shares are mixed after gains on Wall Street

Asian shares are mixed after gains on Wall Street

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Asian shares are mixed after gains on Wall Street

Asian stocks were mixed Tuesday after stocks advanced on Wall Street and yields jumped in the U.S. bond market as election-related issues swayed markets worldwide.

U.S. futures fell and oil prices rose. The Japanese yen fell to near a fresh 38-year low, reaching 161.66 yen to the dollar early Tuesday.

Tokyo’s benchmark Nikkei 225 added 1.1% to 40,062.42, as the weaker yen spurred buying of export-oriented shares.

Australia’s S&P/ASX 200 shed 0.4% to 7,719.30. South Korea’s Kospi dropped 0.9% to 2,778.32 despite data from Statistics Korea showing the country’s consumer inflation slowed to an 11-month low in June.

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Hong Kong’s market was higher after a holiday break on Monday. The Hang Seng climbed 0.6% to 17,819.50 and the Shanghai Composite index edged was nearly unchanged at 2,995.78.

Elsewhere, Taiwan’s Taiex gained 0.6%, while the SET in Bangkok was 0.6% lower.

On Friday, the S&P 500 rose 0.3% to 5,475.09. The Dow Jones Industrial Average edged up 0.1% to 39,169.52, and the Nasdaq composite gained 0.8% to 17,879.30.

Some of the world’s strongest action was across the Atlantic, where the CAC 40 index in Paris jumped as much as 2.8% before settling to a gain of 1.1%. Results from France suggested a far-right political party may not win a decisive majority in the country’s legislative elections. That bolstered hopes for potential gridlock in the French government, which would prevent a worst-case scenario where a far-right with a clear majority could push policies that would greatly increase the French government’s debt.

This is a big year for elections worldwide, with voters heading to the polls in the United Kingdom later this week and soon elsewhere. In the United States, pollsters are measuring the fallout from last week’s debate between President Joe Biden and former President Donald Trump.

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Investors are also eyeing the potential impact from a Supreme Court ruling Monday that former presidents have broad immunity from prosecution, likely extending the delay in a criminal case against Donald Trump to after the November election.

Trump Media & Technology Group, whose stock has been rising and falling with Trump’s White House chances, climbed 1% to $33.08. Shares of the company behind Trump’s Truth Social platform, though, are still well below their perch of roughly $70 reached earlier this year.

Treasury yields jumped, as they did Friday immediately following the Biden-Trump debate. Increased prospects for a Republican sweep in November sent traders back to moves from 2016, according to strategists at Morgan Stanley. Besides pushing rates higher, traders also piled into stocks of energy and financial companies.

The yield on the 10-year Treasury climbed to 4.46% from 4.39% late Friday and from 4.29% late Thursday. It’s a reversal of the general trend since the spring, when the 10-year Treasury yield had topped 4.70% in late April.

Yields had been largely easing on hopes inflation will slow enough to convince the Federal Reserve to cut its main interest rate later this year, down from the highest level in more than two decades. High rates have been grinding on the U.S. economy by making it more expensive to borrow money for a house, car or anything else.

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Stocks are getting an early boost. More from AP’s Damian Troise.

Hopes for rate cuts held after a report on Monday showed U.S. manufacturing weakened last month by more than economists expected. Perhaps even more importantly for Wall Street, the report from the Institute for Supply Management also said price increases are decelerating. Taken together, the data could offer more of the evidence that the Federal Reserve wants to see of lessening pressure on inflation before it will cut rates.

This week’s economic highlight will likely arrive Friday, when the U.S. government will say how many workers employers hired during June. Economists predict overall hiring slowed to 190,000 from May’s 272,000. That would get the number closer to what Bank of America calls the “Goldilocks” figure of roughly 150,000, give or take 25,000.

At that level, the U.S. economy could continue to grow and avoid a recession without being so strong that it puts too much upward pressure on inflation.

In other dealings, benchmark U.S. crude rose 12 cents to $83.50 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, added 19 cents to $86.79 a barrel.

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The euro cost $1.0731, down from $1.0738. 

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Oil market likely to be in surplus next year, Morgan Stanley says

Oil market likely to be in surplus next year, Morgan Stanley says

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Oil market likely to be in surplus next year, Morgan Stanley says

The crude oil market is currently tight but next year will likely be in surplus, with Brent prices declining into the mid-to-high $70s range, Morgan Stanley said.

The tightness will hold for most of the third quarter, the bank said in a note dated on Friday, but equilibrium will return by the fourth quarter, “when seasonal demand tailwinds abate and both OPEC and non-OPEC supply return to growth.”

Three sources told Reuters last week that OPEC+ is unlikely to recommend changing the group’s output policy at a mini-ministerial meeting next month, leaving in place a plan to start unwinding one layer of oil output cuts from October.

Morgan Stanley said it expects OPEC and non-OPEC supply to grow by about 2.5 million barrels per day (bpd) in 2025, well ahead of demand growth.

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Refinery runs are set to reach a peak in August this year, and unlikely to return to that level until July 2025, it said.

Morgan Stanley left its forecast for Brent crude prices for the third quarter of 2024 unchanged at $86 per barrel. Earlier this month, Goldman Sachs also maintained its projection for the quarter at an average Brent price of $86 a barrel.

Brent crude prices on Monday were up 0.54% at $83.08 a barrel by 0535 GMT, and US West Texas Intermediate crude futures were up 0.54% at $80.56. 

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Asia stocks skid as China trims rates; Biden steps aside

Asia stocks skid as China trims rates; Biden steps aside

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Asia stocks skid as China trims rates; Biden steps aside

Asian shares slid anew on Monday, getting little lift from a surprise rate cut by China’s central bank, while Wall Street futures firmed in the wake of President Joe Biden’s decision to bow out of the election race.

The People’s Bank of China cut short-term rates by 10 basis points, which pulled down long-term borrowing costs and bond yields. The move follows Beijing’s release of a policy document on Sunday outlining its ambitions for the economy.

Investors seemed underwhelmed with the move, in part as it only emphasised how weak the economy was, and Chinese blue chips slipped 0.9% along with the yuan.

“Basically all the fundamental factors point to the fact that China needs a lower rate environment, especially the real rate is really high…in this kind of disinflationary environment,” said Gary Ng, Asia-Pacific senior economist at Natixis in Hong Kong.

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“I think the general trend is that it’s pretty much in line with the fact that the economy is not that great, and it seems that there’s a bit of urgency from the authorities to stimulate it now.”

MSCI’s broadest index of Asia-Pacific shares outside Japan lost another 0.7%, having shed 3% last week.

Japan’s Nikkei dropped 1.2% and South Korea’s benchmark index fell 1.3%. Taiwan was having another tough session with a loss of 2.3% amid concerns about US restrictions on chip sales.

Investors seemed much better prepared for news President Biden would drop out of the election race and endorse Vice President Kamala Harris for the Democratic ticket.

Online betting site PredictIT showed pricing for a victory by Donald Trump had fallen 4 cents to 60 cents, while Harris climbed 12 cents to 39 cents. California governor Gavin Newsom, another possible Democratic challenger, trailed at 4 cents.

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Markets took the news in their stride, with S&P 500 stock futures nudging up 0.1%, while Nasdaq futures added 0.2%. Futures for 10-year Treasuries rose 2 ticks, while 10-year bond yields dipped 2 basis point to 4.22%.

EUROSTOXX 50 futures added 0.5%, while FTSE futures firmed 0.4%.

“As Trump’s polling results have lifted, markets have favoured positions that anticipate more trade barriers and possibly higher inflation,” ANZ analysts said.

“Some polls have Harris performing better than Biden against Trump, and the Democrats will be hoping the next polls feature a Harris-driven bump.”

EYE ON EARNINGS

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A packed week of corporate earnings will see Tesla and Google-parent Alphabet kick off the season for the “Magnificent Seven” megacap group of stocks.

Others reporting include General Electric, General Motors, Ford and Lockheed Martin.

The tech sector is projected to increase year-over-year earnings by 17%, while profit for the communication services sector is seen rising about 22%.

Such gains would outpace the 11% estimated rise for the S&P 500 overall, according to LSEG IBES.

Europe’s biggest banks also report this week, with eyes on whether the gains from higher interest rates have run out of steam and if recent political drama is weighing on sentiment.

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A busy week for economic news will culminate with the Federal Reserve’s favoured inflation measure out on Friday. The core personal consumption expenditures index is seen rising 0.1% in June, pulling the annual pace down a tick to 2.5%.

Markets are wagering heavily that a benign outcome will firm the case for a September rate cut, which futures are pricing as a 97% chance.

Also due are figures for advance gross domestic product that are forecast to show growth picking up to an annualised 1.9% in the second quarter, from 1.4% in the first.

The closely watched Atlanta Fed GDPNow indicator points to growth of 2.7%, suggesting some risk to the upside.

The Bank of Canada meets on Wednesday and is considered almost certain to cut its rates by a quarter point to 4.5%.

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In currency markets, the dollar gave back just a little of last week’s safe haven gains as the euro edged up 0.1% to $1.0886. The dollar was a fraction softer on the Japanese yen at 157.27.

In commodity markets, gold held at $2,406 an ounce and short of last week’s record high of $2,483.60.

Oil prices inched higher, with scant sign of progress on a ceasefire deal in Gaza as Israeli forces battled Palestinian fighters in the southern city of Rafah on Sunday.

Brent gained 44 cents to $83.07 a barrel, while US crude rose 41 cents to $80.54 per barrel.

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FinMin Aurangzeb set to visit China to reschedule $15 loans

FinMin Aurangzeb set to visit China to reschedule $15 loans

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FinMin Aurangzeb set to visit China to reschedule $15 loans

 In order to reschedul energy loans worth $15 billion, Finance Minister Muhammad Aurangzeb is all set to visit China for three days tomorrow.

The minister will discuss the loan rescheduling with the Chinese authorities. The minister will also discuss China’s energy circular debts worth Rs500 billion.

Read more: Finance Minister Aurangzeb leads delegation to US for IMF talks on new bailout package

The minister will also discuss Panda Bonds during the visit to get the $30 million bonds in China.

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