Morning Markets: Shares rise into Yellen testimony
Watchlist
- Italy: Industrial Production (0800 GMT)
- US: Small Business Optimism Index (1000 GMT)
- Canada: Housing starts (1215 GMT)
- US: Job Openings & Labor Turnover Survey (1400 GMT)
- US: API weekly statistical bulletin, incl. crude oil stocks (2030 GMT)
Asian equities climbed on the back of small gains for Wall Street, with the Nikkei rising 0.57%, the Hang Seng up 1.1%, and South Korea's Kospi index closing up 0.54% ahead of Federal Reserve chair Janet Yellen's testimony to the US Congress Wednesday and Thursday.
Markets appear prepared for further hawkishness from the Fed as well as some potential word on balance sheet reduction after June's strong headline nonfarm payrolls number, although average earnings remain soft.
Consumer discretionary and telecommunications shares posted the largest sectoral rises in Japan, while Australia's ASX 200 slipped 0.1% despite a 0.4% rise in materials stocks.
Bond yields posted a mixed Tuesday session with 10-year US Treasury yields 0.5% lower. Gold, meanwhile, responded to the still-muted burst of risk sentiment with a 0.2% dip.
US politics remain in the headlines as the media probes Donald Trump Jr.'s meeting with Russian officials prior to the election, with the president's son having apparently been seeking information on Trump rival Hillary Clinton.
Japanese bond yields, meanwhile, rose by 0.4 basis points to 0.090% as officials struggle to rein in upward pressure on yields with renewed, unlimited purchases of Japanese government bonds.
Today's data calendar sees the American Petroleum Institute out with its latest inventory numbers.
Market signals
Asian session
- Asian markets gained after a slow start and following a subdued Wall Street
- Markets await Janet Yellen's testimony to Congress on Wednesday and Thursday
- NAB business confidence index added 1 point to +9, beating long-run average
- Australian home loan approvals rose 1%, missing expectations for a rise of 1.5%
- San Francisco Fed's John Williams expects one more rise in US interest rates
- Australian government notes with a similar maturity climbed two basis points to 2.76%
- WTI crude strengthened 0.4% to $44.56/barrel amid talks of production caps
- Gold was down 0.2% at $1,211.40/oz
- Japanese and South Korean equities rose but with low volumes
Forex ahead
- The US dollar advance slowed on Tuesday
- The yen was down 0.3% at 114.41 at 0655 GMT, declining for a third day.
- The AUD had moved up slightly to 76.21 US cents
- The NZD slid 0.6% to 72.32 US cents.
- The Korean won fell 0.2% to 1,151.50 per dollar
From the Floor
Firmer equities. “Sentiment is strengthening in Europe and Asia,” says Garnry.
Weather impact. “Crop conditions continue to deteriorate,” says Hansen.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
In opinion
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Italy's industrial production is projected to pick up to a 2.2% year-over-year rate, writes James Picerno, auguring well for the overall Eurozone recovery.
Asia makes gains
After a subdued Wall St and a mixed start, Asian markets had mostly gained by midday on Tuesday, writes the Saxo APAC Sales Trading team.
Waiting for Yellen
Markets looked ahead to Janet Yellen's congressional testimony and the US earnings season, writes the team at Saxo Capital Markets (Australia).
Buying spree
Hedge funds turned buyers of commodities in the week up to the July 4th US holiday, and a 50% jump in the net-long position was primarily driven by short-covering, writes Ole Hansen.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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