NEW YORK, April 17 — Asian index futures were signalling a pullback today, with regional stocks at a seven-year high amid surging demand for Hong Kong shares. The dollar maintained its retreat, while oil headed for its best week since 2011.
Futures contracts on equity gauges from Japan to Australia declined in most recent trading following yesterday’s 1.1 per cent surge in the MSCI Asia Pacific Index. Standard & Poor’s 500 Index futures were little changed by 7.56am in Tokyo after the index erased early gains to end the New York day down 0.1 per cent. The greenback was headed for its worst week in almost a month versus the yen and the euro and the Australian dollar. US oil has rallied almost 10 per cent this week.
Chinese stocks listed in Hong Kong have been soaring as a loosening of rules surrounding an exchange link with Shanghai spurred an onslaught of mainland inflows, while speculation policy makers will boost stimulus burnished sentiment. The US reports on consumer prices today, amid lackluster data that has knocked the dollar from multi-year highs this month. Oil gained 13 per cent in six straight days of gains on speculation US output, which has fuelled the global glut, may be easing.
“Data to date has failed to improve to the extent hoped,” Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand Ltd, wrote in a note e-mailed to clients. “The risk is a later start to Fed lift-off and more gradual path of policy normalisation.”
Mixed messages
Investors are mulling US data as they try to determine the Federal Reserve’s likely path on interest rates. Officials from the US central bank continued to provide conflicting signals yesterday, spurring fluctuations in Treasuries. Ten-year yields ended the US session little changed at 1.89 per cent after swinging between gains and losses.
Fed Vice Chairman Stanley Fischer sent Treasuries tumbling after reminding investors that the central bank wants to boost key borrowing costs. The Fed can’t hold rates near zero forever, he said. Fed Bank of Atlanta President Dennis Lockhart then halted the selloff, saying he wanted to see both falling unemployment and quickening inflation prior to the first rate increase.
The greenback was little changed at ¥119.03 (RM3.64) today after dropping every day since April 10. The US currency is down 1 per cent against Japan’s this week, the most since the week ended March 20. The euro is up 1.5 per cent this week, while Australia’s dollar has climbed 1.4 per cent. The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 major peers has slumped 1.5 per cent in the week.
Asian futures
Futures on Japan’s Nikkei 225 Stock Average dropped 0.3 per cent to 19,830 by 3 am in Osaka, while contracts traded on the Chicago Mercantile Exchange were little changed at 19,830 following a 0.2 per cent drop.
Contracts on Australia’s S&P/ASX 200 Index declined 0.1 per cent with contracts on the Hang Seng Index, while futures on the Hang Seng China Enterprises Index, which tracks mainland Chinese shares in Hong Kong, were down 0.3 per cent. The gauge is up 5.2 per cent this week to a more-than seven-year high, set for a third straight week of gains.
Ten-year Greek bond yields rose to their highest level in more than two years yesterday, while credit-default swaps suggested there was a 79 per cent chance of the nation being unable to repay its debt in five years.
German Finance Minister Wolfgang Schaeuble ruled out further concessions to Greece in a Bloomberg Television interview in New York Wednesday, saying it’s up to the Greek government to commit to the reforms needed to release aid rather than give false hopes to its people. S&P downgraded Greek debt this week, citing the cash-strapped country’s deteriorating economic outlook.
West Texas Intermediate crude dropped 0.2 per cent to US$56.59 (RM205.98) a barrel today after six days of gains. WTI is headed for a weekly advance of 9.6 per cent, the most since February 2011 and the fifth straight weekly climb.
Crude supplies increased last week at the smallest pace since January, the Energy Information Administration said Wednesday. Prices also gained as the dollar weakened and the crisis in Yemen spread. — Bloomberg
