Chinese Stocks Rally After Data, Gold Hits Record: Markets Wrap

(Bloomberg) — Chinese shares rose by the most in a month on fresh signs of an economic recovery, forming a bright spot in Asia. Gold hit a record.

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Benchmarks gained in China and South Korea, while Japanese equities fell after a report showed confidence among the country’s large manufacturers weakened slightly for the first time in four quarters. US futures edged higher in Asia, with markets in Australia and Hong Kong shut for a holiday.

China’s CSI 300 Index jumped as much as 1.7%, the most since Feb. 29, as a rebound in manufacturing activity reinforced hopes that the nation’s economic recovery may be starting to gain traction.

“Emerging optimism about China is real,” said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank in Singapore. It may gain traction given “corresponding optimism elsewhere in Asia that dovetails with an upturn in global manufacturing,” he said.

Treasury yields were largely steady in Asia after Federal Reserve Chair Jerome Powell said Friday the central bank’s preferred gauge of inflation was “pretty much in line with our expectations.” Powell added that it wouldn’t be appropriate to lower rates until officials are sure inflation is in check. Investors are betting the US central bank will make that first cut in June.

The core personal consumption expenditures price index — which excludes volatile food and energy costs — rose 0.3% in February after climbing in the previous month, marking its biggest back-to-back gain in a year. The measure is up 2.8% from a year earlier, still above the Fed’s 2% target.

The dollar was steady.

“You have a Fed that at the moment is highly data dependent,” said Matthew Luzzetti, chief US economist at Deutsche Bank. “Until we get either confirmation or a different view on what the data are going to be, it’s kind of hard to gauge exactly where we end up from a Fed policy perspective.”

Story continues

In commodities, iron ore fell to the lowest in 10 months as China’s years-long property crisis continued to pressure prices. Gold extended a rally that’s been driven by the Federal Reserve moving closer to rate cuts and deepening geopolitical tensions.

Elsewhere, Bitcoin was steady after trading above $71,000. The largest digital currency has jumped almost 70% this year amid persistent demand for US exchange-traded funds holding the token.

Key events this week:

• Indonesia CPI, manufacturing PMI, Monday

• Pakistan trade, CPI, Monday

• US construction spending, ISM Manufacturing, Monday

• Bank of Canada issues business outlook and survey of consumer expectations, Monday

• Eurozone S&P Global Manufacturing PMI, Tuesday

• France S&P Global Manufacturing PMI, Tuesday

• Germany S&P Global / BME Manufacturing PMI, CPI, Tuesday

• India HSBC/S&P Global Manufacturing PMI, Tuesday

• Mexico international reserves, Tuesday

• South Korea CPI, Tuesday

• Spain unemployment, Tuesday

• UK S&P Global / CIPS Manufacturing PMI, Tuesday

• US factory orders, light vehicle sales, JOLTS job openings, Tuesday

• Brazil industrial production, Wednesday

• Eurozone CPI, unemployment, Wednesday

• Hong Kong retail sales, Wednesday

• US ISM Services, Wednesday

• Eurozone S&P Global Services PMI, PPI, Thursday

• India services PMI, Thursday

• US initial jobless claims, trade, Thursday

• Eurozone retail sales, Friday

• France industrial production, Friday

• Germany factory orders, Friday

• Hong Kong PMI, Friday

• India rate decision, Friday

• Japan household spending, Friday

• Philippines CPI, Friday

• Russia GDP, Friday

• Singapore retail sales, Friday

• South Korea current account balance, Friday

• US unemployment, nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.3% as of 11:35 a.m. Tokyo time

• Nasdaq 100 futures fell rose 0.5%

• Japan’s Topix fell 1.9%

• The Shanghai Composite rose 1.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0788

• The Japanese yen was little changed at 151.30 per dollar

• The offshore yuan was little changed at 7.2523 per dollar

Cryptocurrencies

• Bitcoin was little changed at $70,819.51

• Ether fell 0.6% to $3,609.75

Bonds

Commodities

• West Texas Intermediate crude rose 0.3% to $83.44 a barrel

• Spot gold rose 1.2% to $2,255.77 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from John Cheng.

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