(Bloomberg) — Asian shares took a breather on Tuesday after seven days of gains, and a gauge of commodities reached a 15-month high. Traders’ focus turns to earnings from chipmaker Nvidia Corp. later in the week.
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While Japanese shares rose, stocks in Hong Kong, China and Australian stocks retreated, sending the MSCI all-country gauge lower in early Asian trading after an eight-day advancing streak. Gold changed hands just shy of an all-time high and wheat prices surged. The Bloomberg Commodity Spot Index reached its highest level since January 2023 on Monday.
Trading across financial markets is being shaped by bets on when the Federal Reserve may finally decided to ease monetary policy, as well as views on the US corporate sector and China’s economy regaining strength. At the same time, developments in the Middle East have the potential to trigger a rise in risk aversion.
Nvidia — one of the top companies powering the artificial-intelligence frenzy — is due to report earnings later this week.
“For the market to keep momentum this week, it may come down to just one stock – Nvidia,” said Jay Woods at Freedom Capital Markets. “It sure feels like the hype for this earnings event will be the talk of trading desks and financial media all week.”
In Asia, China’s economic struggles remain in the spotlight, with fresh data showing there’s little sign of a turnaround in its debt-plagued property sector. Local governments reaped the least revenue in eight years through land sales last month, showing the fiscal strains faced by those authorities who depend on such revenue for a large chunk of their total income.
The yield on 10-year US Treasuries was little changed, while that on Japan’s 10-year debt nudged higher.
Australia’s central bank resumed a discussion of interest-rate hikes at its May policy meeting before deciding that the case to stand pat was stronger as it aims to avoid “excessive fine tuning.”
Speaking overnight, Cleveland Fed President Loretta Mester joined the ranks of US policy makers suggesting less scope for interest rate cuts than previously expected.
In the Middle East, developments in Iran and Saudi Arabia have the potential to shape the trajectory of the crisis-plagued region for years to come. The death of Iranian President Ebrahim Raisi’s death in a helicopter crash has opened questions over who might succeed the country’s Supreme Leader Ayatollah Ali Khamenei, who is in his mid-80s. There are also renewed questions over the health of Saudi Arabia’s elderly king.
Key events this week:
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Fed’s Thomas Barkin, Christopher Waller, John Williams, Raphael Bostic, Susan Collins, Loretta Mester speak, Tuesday
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US existing home sales, Wednesday
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Fed minutes, Wednesday
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Nvidia earnings, Wednesday
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, consumer confidence, Thursday
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G-7 finance meeting in Stresa, Italy, May 23-25
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US new home sales, initial jobless claims, Thursday
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Fed’s Raphael Bostic speaks, Thursday
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US durable goods, University of Michigan consumer sentiment, Friday
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Fed’s Christopher Waller speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 10:31 a.m. Tokyo time
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Nikkei 225 futures (OSE) rose 0.3%
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Japan’s Topix rose 0.3%
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Australia’s S&P/ASX 200 fell 0.2%
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Hong Kong’s Hang Seng fell 1%
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The Shanghai Composite fell 0.3%
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Euro Stoxx 50 futures fell 0.2%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0860
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The Japanese yen fell 0.1% to 156.48 per dollar
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The offshore yuan was little changed at 7.2483 per dollar
Cryptocurrencies
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Bitcoin rose 2% to $70,930.45
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Ether rose 4.4% to $3,655.67
Bonds
Commodities
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West Texas Intermediate crude fell 0.1% to $79.72 a barrel
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Spot gold rose 0.2% to $2,429.30 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth.
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