Tech and property selling in Hong Kong weighed on Asian markets on Thursday. The dollar fell as slowing U.S. inflation suggested the Federal Reserve’s rate hike cycle was nearing its conclusion.
Euro reached a 2-1/2-month high at $1.10 early in Asia. Europe’s blue-chip stocks (.STOXX50) hit a two-decade high on Wednesday, and investors think Europe’s central bankers will need to be more hawkish longer than their U.S. counterparts to control increasing prices.
U.S. and European futures rose 0.1% and 0.2%. Chinese exports jumped 14.8% from March, and Australian jobs boosted the Aussie currency by 0.2%.
Hong Kong tech (.HSTECH) and China property stocks (.HSMPI) are down 1%, pushing MSCI’s broadest Asia-Pacific index outside Japan (.MIAPJ0000PUS) down 0.3%.
Analysts said March exports’ surprising surge was unlikely to be sustained due to decreasing global demand, sending China’s major stock indexes marginally down.
The Financial Times said SoftBank was selling its Alibaba share after Netherlands investor Prosus’s Tencent stake sale on Wednesday. Tech stocks fell.
“It was a cluster of bad news,” said Maybank Singapore stock sales trading head Wong Kok Hoong. “Interestingly, though, SoftBank trimming…may lift the final overhang on Alibaba shares,” he added, encouraging purchases.
Alibaba (9988. H.K.) shares fell more than 5% before recovering to 2.4% at noon.
SoftBank (9434.T) shares climbed 0.2%, along with the Japan market (.N225), on a five-session winning run after Warren Buffett increased Japan’s exposure.
After a year-long suspension, property developer Sunac China (1918. H.K.) stock fell 50%, putting pressure on a sector trying to stabilize. Sunac is debt-restructuring.
After plummeting more than eight basis points on Wednesday after U.S. consumer prices barely climbed in March, two-year Treasury rates remained flat at 3.985% in Asia.
U.S. inflation fell to 5% from 9.1% in June.
Markets are worried about core CPI stuck at 5.6% and minutes from last month’s Fed meeting indicating members are apprehensive about credit tightening after March banking sector wobbles.
British monthly GDP, Tesco (TSCO.L) results and U.S. producer prices are coming later Wednesday.
Given the Fed’s worries about banks, Citi (C.N.), Wells Fargo (WFC.N), and JP Morgan Chase (JPM.N) results on Friday likely dominate the week.
“It is a ‘if’ monetary policy world, that is, wait and see about banking and financial conditions,” said Sam Rines, managing director of Texas research company CORB. “Banking sector issues are explicitly part of the reaction function now.”
Since no banks have collapsed since Silicon Valley Bank’s weekend collapse a month ago, Goldman Sachs’ top economist Jan Hatzius was optimistic.
This week, Rines observed that the Bank of South Carolina reported “precipitous increases” in deposit costs and low margins in its first-quarter earnings.
Brent crude futures stayed at $87.02 a barrel after the inflation report. Gold remained at $2,018.
Bitcoin held around $30,008 this week, breaking above $30,000 for the first time since mid-2022.
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