Asian stocks recover as cautious investors wait for US data and Reuters profits



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© Reuters. A man looks at a stock chart outside a brokerage house in Tokyo

By Andrew Galbraith

SHANGHAI (Reuters) – Most Asian stock markets advanced on Monday, but gains were limited as investors waited for US retail data and corporate earnings to gauge the health of the world's largest economy. forecast of a possible US rate cut this month.

European markets seemed ready for an equally cautious session, with the pan-region losing 0.14% at the start of trading.

The Germans were up 0.04%, futures fell by 0.18% and financial promoters saw the opening of France.

The largest MSCI index of Asia Pacific shares outside Japan rose 0.3%, losses of Chinese stocks limiting gains in other regions of the region.

The Chinese CSI300 first-rate index fell 0.3%, investors worried about the slowdown in the world's second largest economy and the impact of the Canada-US trade war United, even as new data shed light on Beijing's efforts to boost spending. ()

South Korea added 0.4% after a slow start, and shares in Taiwan rose 0.1%.

The Australian market dropped 0.1%, which was not upset by the publication of the dovish account of the July meeting of the Reserve Bank of Australia.

The Japanese stock index ended down nearly 0.7%.

The encouraging figures released by China last June have somewhat appeased investors anxious about the economic outlook, but the pressure on business and global investment from the trade war and the slowdown in global growth is reinforcing the expectations of investors. relaxation of the policies of the major central banks.

"A reduction in the US rate should help Asian central banks relax their policies, boosting domestic demand in the region," said Yukino Yamada, senior strategist at Daiwa Securities.

"We still do not know what to expect from the trade war between the United States and China (…) October)," she said.

In one night, US President Donald Trump has shown no sign of alleviating his stance towards China, warning that Washington could exert more pressure when trade talks continue.

US data released Tuesday is expected to show retail sales rose 0.1% in June, according to the median estimate of economists polled by Reuters. But a drop in the net interest margin reported by Citigroup (NYSE 🙂 in its mixed quarterly report highlighted the risks for financial companies in a low interest rate environment.

This decline partially overshadowed earnings above expectations, causing shares of other banks to fall, fearing to post lower profits across the sector.

"Obviously, the biggest risk for the last rally is the earnings season," said Ryan Felsman, senior economist at CommSec Sydney.

Signs of trade tensions weighing on corporate profits and mitigating the effects of tax cuts would highlight the US Federal Reserve's concerns about slowing investment, he said.

"This feeds concerns about the global economy, the slowdown in the US economy, but also the need for potentially more aggressive rate cuts by the Fed to support the economy. American in the future, "said Felsman.

Markets fully took into account the Fed's 25 basis point cut at its meeting at the end of the month.

The Asian trading session followed a similarly calm day on Wall Street, rising 0.1%, up 0.02% and up 0.17%.

LIGHT LAMP

Signs of improving economic conditions in the United States have led to a stronger yield curve in the United States, driven by higher long-term yields.

This was slightly reversed on Tuesday, with the benchmark return reaching 2.0973%, compared with 2.092% on Monday in the United States.

The two-year return, closely monitored by the federal funds rate indicator, grew faster, reaching 1.8416%, compared with 1.833% in the United States.

On the foreign exchange market, the dollar rose 0.09% against the yen to 108.00 and the euro rose 0.04% to 1.1261 dollar.

The, who follows the greenback against a basket of six major rivals, was a little stronger at 96.962.

Oil prices stabilized after earlier easing, suggesting that the impact of a tropical storm on Gulf Coast production in the US Gulf would be short-lived.

The global benchmark remained unchanged at $ 66.48 a barrel and US crude WTI (West Texas Intermediate) plunged 0.12% to $ 59.51 a barrel.

The gold trade echoed the cautious tone of stock markets preceding US data. The precious metal was down 0.03% in the spot market, to $ 1,413.20 an ounce.

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