(Bloomberg) — Stocks in Asia edged higher Thursday after US shares snapped a two-day losing streak as investors weighed evidence of a slowing US economy with mixed Federal Reserve commentary from its latest meeting.
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Equity benchmarks in Australia and South Korea rose less than 1%, while Japanese stocks fluctuated. Futures contracts for Hong Kong edged higher, indicating further gains after a jump on Wednesday following favorable news from China. Contracts for the S&P 500 moved in and out of negative territory after the index gained 0.8% in the prior session.
Australian and New Zealand 10-year government bonds rallied. Treasuries of the same maturity held gains after advancing Wednesday. The dollar stemmed a decline and the yen rose.
Federal Reserve minutes from its December meeting showed many officials highlighted the need to curb inflation without slowing the economy too much, heartening some investors. However, policy makers also worried that a hot jobs market and looser financial conditions, including market expectations for rate cuts this year, could imperil the task of damping rising consumer prices.
“The Fed wanted to send a message to the market that they would not be easing or cutting rates anytime in 2023,” said Joe Gilbert, portfolio manager for Integrity Asset Management. “However, we must remember that the Fed also did not forecast raising rates by 400 basis points twelve months ago, so their forecasting ability of their own actions is sometimes quizzical.”
Read More: Fed Affirms Inflation Resolve, Pushes Back Against Rate-Cut Bets
Data released Wednesday showed improving supply chain conditions, declining input prices and slower demand — all developments the Fed would welcome. But job openings data pointed to a robust labor market, which rattled investors. The nonfarm payrolls report on Friday will provide a clearer picture of the labor market.
The price of crude rose after falling 9.5% in two days, including the biggest daily decline since September on Wednesday. China’s complicated reopening is one factor that drove the decline. Gold traded flat after touching the highest level since June on Wednesday.
Key events this week:
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Eurozone PPI, Thursday
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US ADP employment change, initial jobless claims, Thursday
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China trade, Caixin PMI, Thursday
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Eurozone retail sales, CPI, consumer confidence, Friday
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Germany factory orders, Friday
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US nonfarm payrolls, factory orders, durable goods, Friday
The main markets moves are:
Stocks
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S&P 500 futures were little changed as of 9:15 a.m. Tokyo time. The S&P 500 rose 0.8%
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Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.5%
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Hang Seng futures rose 1.7%
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Japan’s Topix rose 0.1%
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Australia’s S&P/ASX 200 rose 0.3%
Bonds
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The yield on 10-year Treasuries advanced one basis point to 3.69%
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Japan’s 10-year yield was little changed at 0.46%
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Australia’s 10-year yield declined eight basis points to 3.83%
Commodities
This story was produced with the assistance of Bloomberg Automation.
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