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Bonds climbed with the yen as investors monitor a tremor near North Korea’s nuclear-test site and ahead of China trade data as well as U.S. inflation figures that may provide clues on the pace of monetary policy tightening.
The S&P 500 Index edged lower and Asian equity-index futures were largely flat. Treasuries rose as strong demand at a sale of 30-year bonds showed appetite for longer-dated U.S. debt even as the Fed winds down its balance sheet. Oil sank as the International Energy Agency said crude inventories may remain bloated next year. The pound rallied as Handelsblatt reported that Europe’s negotiator Michel Barnier may offer the U.K. a two-year transition to stay in the single market as long as Britain meets its financial obligations. Bitcoin surged to a fresh record, climbing above $5,300.
Economic signals remain crucial, with key data due out from China and the U.S. on Friday, as the U.S. earnings season got underway. JPMorgan Chase & Co. and Citigroup Inc. shares sank on muted trading and concerns about consumer credit. Bank of Japan Governor Haruhiko Kuroda showed no sign of wavering from his intention to maintain stimulus to hit an inflation target of 2 percent in a speech in Washington.
The Trump administration’s tax plan remains nebulous, as the president was said to voice frustration with certain aspects of the existing framework. Some Congressional Republicans have aired concerns, while Treasury Secretary Steven Mnuchin reiterated his confidence that a plan will get passed this year.
A tremor near North Korea’s nuclear-test site could be either man-made or natural, according to the U.S. Geological Survey, adding the event had “earthquake-like characteristics.” Bomb tests have caused some of the previous shaking in the area, but the 2.9 magnitude compares with a reported 6.3 for the H-bomb test in September.
Terminal subscribers can read more in our Markets Live blog.
What’s coming up this week:
- China’s exports probably gained 10 percent in September from a year earlier, picking up from August’s 5.6 percent, on robust U.S. and EU demand. Import growth is also expected to accelerate, with the trade surplus narrowing to $38 billion. Any resurgence in Beijing-Washington friction could threaten future increases. The PBOC may also release new loan and money supply data for last month.
- The active Atlantic hurricane season will probably figure prominently in U.S. data on retail sales and consumer prices.
- On Friday at 1 p.m. in Hong Kong, Bloomberg Intelligence Chief Asia Economist Tom Orlik and Bloomberg Asia Government’s Peter Martin will be answering your questions about China’s Communist Party Congress in a TOPLive Q&A. Follow the blog at TLIV <GO>.
Here are the main moves in markets:
- Futures on the S&P 500 Index were little changed as of 7 a.m. in Tokyo. The underlying gauge declined 0.2 percent, on course to snap a four-week winning streak.
- Futures on Japan’s Nikkei 225 added 0.2 percent.
- Contracts on Australia’s S&P/ASX 200 Index were flat, as were those on Hong Kong’s Hang Seng Index.
- The Bloomberg Dollar Spot Index gained less than 0.1 percent, adding to an advance on Thursday after four days of losses.
- The euro traded at $1.1831.
- The British pound was at $1.3263. It has gained in the last four sessions. Read more here about Brexit costs and whether Britain will pay up and click here for the Handelsblatt report.
- The yen strengthened to 112.28 per dollar.
- The yield on 10-year Treasuries decreased three basis points to 2.32 percent and the 30-year yield was also down three basis points at 2.85 percent.
- The yield on Australia’s 10-year government bond slid two basis points to 2.78 percent.
- West Texas Intermediate crude added 0.3 percent to $50.76 a barrel. It declined 1.4 percent in Thursday’s session, but is still on course to rise 3 percent this week.
- Gold increased 0.1 percent to $1,295.25 an ounce.