By Jamie McGeever
(Reuters) – A look at the day ahead in Asian markets.
Investors hoping that Nvidia’s long-awaited gains after the US shutdown on Wednesday will inject new vigor into global markets will be disappointed, raising the prospect of a tepid opening in Asia on Thursday.
Wall Street was firmly in the red all day Wednesday before a late rally. Bond yields and the dollar were higher, and a weak auction of 20-year U.S. Treasury notes was a reminder of the size of Washington’s budget deficit and the pressure on investors to finance. It.
The global picture was also not exactly reassuring. European shares fell for a fourth day – their worst performance in more than two months – the Chinese yuan fell to a three-and-a-half month low on the spot market, and volatility increased.
Then came Nvidia. The world’s most valuable company reported third-quarter earnings per share and forecast fourth-quarter revenue that was slightly above expectations. But shares immediately fell as much as 5% in after-hours trading before recovering, and futures on Nikkei and Wall Street point to a lower open in Japan and the US on Thursday.
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Thursday’s economic calendar in Asia is relatively light, with South Korean exports, Indonesia’s current account and inflation figures from Hong Kong the main figures.
Hong Kong’s annual inflation rate is expected to slow to 1.7% in October from 2.2% in September, marking the steepest decline since April and raising concerns that deflationary pressures in mainland China could spread.
More market fireworks may come from Kazuo Ueda, governor of the Bank of Japan, who will speak at a financial forum in Paris. Investors and traders will try to determine whether his tone and signals differ from his fairly balanced comments earlier this week, which left the door open for a rate hike in December but also warned against acting too quickly.
Judging from the yen’s recent behavior, whatever markets think the BOJ will do will be completely overwhelmed by renewed hawkishness on the Fed’s prospects.
The yen has appreciated in only one of the last eight trading sessions and is back below 155.00 per dollar. A noticeably aggressive signal from Ueda may be needed to create a sustained recovery or get back within sight of September’s $140.00 per dollar.
But right now, the Japanese swap market suggests the BOJ will tighten by less than 50 basis points by the end of next year.
Meanwhile, Bitcoin is inching closer to a historic break above $100,000, boosted by growing confidence that President Donald Trump’s administration will be a crypto-friendly regime.
