SHANGHAI (Reuters) – Asian stocks moved between weak losses and gains on Friday as investors waited for key data on trade and lending in China, and worries about China-US trade tensions thwarted optimism sparked by expectations of a Federal Reserve rate cut this month.
PHOTO FILE: Passersby pass by an electric screen showing Asian market indices outside a broker in Tokyo, Japan, on July 1, 2019. REUTERS / Issei Kato
Later on Friday, China will release its trade data for the month of June. Analysts expect exports to fall, the weakening of global demand and a sharp rise in US tariffs weigh more heavily on the largest trading nation in the world.
China is also expected to release its loan data on Friday, while GDP figures for the second quarter are scheduled for Monday. The world's second-largest economy is expected to have slowed at its weakest pace for at least 27 years, raising hopes that further stimulus will be taken to avoid a further slowdown.
"You have key data coming out and I do not see why anybody would want to take a stand before having those data," said Michael Every, head of financial market research for the Asia-Pacific region. Pacific at Rabobank in Hong Kong. .
"We get a lot of signals, but until we get the signal, it's noise," he said.
The MSCI's broadest index of Asia-Pacific shares outside Japan. The MMIAPJ0000PUS was up 0.1%. Chinese equities rose, the CSI300 rising 0.7% .CSI300.
Australian stocks dipped 0.1% and Japan's Nikkei stock index, the N225, rose after small early losses of 0.14%.
The KOSPI .KS11 of South Korea rose by 0.37%.
Highlighting the economic impact of global trade tensions, Singapore's economy recorded the weakest growth in the second quarter of the decade in the second quarter, with electronics production declining for a sixth consecutive month in May, and exports registering their largest decline in more than three years.
In the context of the global slowdown, US Federal Reserve Chairman Jerome Powell said on Thursday that a rate cut is likely at the Fed's next meeting.
The bets on such a downgrade remained strong despite rising US consumer inflation in June, and contributed to the 0.23% rise in the S & P 500 index on Thursday, closing a record of closing of 2,999.91 points.
While the Nasdaq .IXIC composite index lost 0.08%, the Dow Jones Industrial Average .DJI index also hit a record high: 27,088.08 points, up 0.85% on the day.
The future e-mini S & P 500 ESc1 Futures contracts increased last 0.24% to 3,011.25.
However, on Thursday, in a tweet by US President Donald Trump, he said that China was not keeping its promises by buying agricultural products from US farmers threatened to revive business concerns.
"The markets have become somewhat calm in the saga of the US-China trade war since the announcement of a truce and the resumption of trade talks at the G20 meeting. Unfortunately, the headlines are starting to appear again, "ANZ analysts wrote in a morning note.
"Although it has not been a big driver of the market, it reminds us that things could still be fun," they said.
US Treasury yields jumped on Thursday after demand was low for a 30-year bond auction worth $ 16 billion. After the US Department of Labor announced that its index of consumer prices excluding food and energy rose by 0.3% in June, the largest increase since January 2018.
The poorly received auction pushed Thursday the 30-year yield to 2,662%, according to Refinitiv data.
But yields have changed little on Friday. The benchmark 10-year Treasury bonds, US10YT = RR, posted a final return of 2.1291%, compared with a 2.12% closing in the United States on Thursday, while the 30-year yield was 2.646%, up from a closing of 2.639%.
The two-year yield US2YT = RR, which increases with traders' expectations for higher federal funds rates, remained unchanged at 1.8524%.
"The CPI report will have no significant impact on the Fed's forecast, nor on the big debate around 25 or 50," said Stephen Innes, managing partner of Vanguard Markets Pte, referring to the expectations of a rate cut in July. .
"After all, the FOMC is undoubtedly willing to let inflation warm up after spending almost a decade trying to light those flames," he said.
The dollar fell 0.05% against the yen to 108.43 JPY =, while the euro gained 0.12% up to buy 1.1256 USD.
The .DXY dollar index, which follows the greenback versus a basket of six major rivals, lost 0.08% to 96.970.
Oil prices have risen as US oil producers in the Gulf of Mexico have reduced their production by more than half in the face of a tropical storm and continuing tension in the Middle East.
The global benchmark for Brent, LCoC1, rose 0.60% to $ 66.92 per barrel. US WTI (West Texas Intermediate) CLc1 crude rose 0.58% to $ 60.55 per barrel.
Gold prices, weakened by stronger than expected US consumption inflation data, have regained their luster thanks to renewed commercial concerns and expectations of rate cuts. XAU spot = last trading up 0.28% to $ 1,407.60 ounce.
Reportage by Andrew Galbraith; Edited by Shri Navaratnam and Richard Borsuk