Asian Stock Market: Grinds lower as Japan holiday tames strong yields

Asian shares seesaw amid a quiet session with Labor Thanksgiving Day in Japan.
Powell’s re-nomination as the Fed Chair boost rate hike concerns and yields.
US warships again sail on Taiwan Strait, covid woes renew in the west.
Preliminary PMIs for November eyed ahead of Wednesday’s FOMC Minutes.

Anil Panchal FXStreet

Off in Japan joins a light calendar to offer sluggish Asian session on Tuesday. Even so, the Asia-Pacific shares remain pressured amid firmer yields as Fed hawks cheer US President Joe Biden’s decision to nominate Jerome Powell for another term as the Federal Reserve (Fed) Chair and Richard Clarida for Vice-Chairman.

That said, MSCI’s index of Asia-Pacific shares outside Japan rises 0.75% whereas the US 10-year Treasury yields remain lackluster around 1.62% ahead of the European session.

Australia’s ASX 200 prints mild gains as mixed PMIs from the Commonwealth Bank of Australia joined comments from Marion Kohler, Head of Domestic Markets at the Reserve Bank of Australia (RBA). Alternatively, New Zealand’s NZX 50 prints mild losses despite downbeat Q3 Retail Sales amid strong bets over the Reserve Bank of New Zealand’s (RBNZ) rate hike during Wednesday’s monetary policy decision.

Elsewhere, fears of China’s softer economic growth and fresh covid woes from the West challenge the equity bulls from Beijing, which in turn drowns shares from South Korea, Indonesia, India and Hong Kong. Also weighing on the Asia-Pacific stocks are fears of fresh US-China tussles as the US warships again sail on the sensitive Taiwan Strait on Tuesday.

On a broader front, firmer US Treasury yields probe equity bulls ahead of the preliminary readings of the November month PMIs for the UK, Eurozone and the US.

Moving on, PMIs and Fed-rate-hike concerns may challenge the share markets while talks over covid resurgence and stimulus from Japan, China and the US can keep buyers hopeful.

Read: US 10-year yield shoots back above 1.60% while 2, 5 and 7-year yields all hit multi-month highs on Powell renomination, bad auctions

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

The week ahead: Dollar at a crossroads as CPI and ECB take centre stage

With the summer finally over, investors returned with a strong appetite for action. Following last week’s strong performance, the US dollar has taken a back seat so far this week, as oil, the yen and sovereign bond yields monopolized market interest.

CFTC report: Oil rebound offsets broader positioning retreat

The week in one sentence: Speculative positioning became more defensive in the week ending September 1. Yen short positioning recorded the largest deterioration, while Gold length also retreated. Oil buying returned alongside stronger prices, and Canadian Dollar and Euro positioning improved, although Euro flows diverged from weaker spot prices.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.