financetom
World
financetom
/
World
/
Morning Bid: Bond vigilantes flex muscles, tech tonic still fizzing
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Morning Bid: Bond vigilantes flex muscles, tech tonic still fizzing
Nov 4, 2024 11:50 AM

(Reuters) - A look at the day ahead in Asian markets. 

Market sentiment in Asia will be fragile at best on Friday as high and rising bond yields sink their teeth into risky assets, and worries about escalating AI costs appear to slam the brakes on the megacap, Big Tech rally.

There probably won't be any positive spillover from Wall Street after the S&P and Nasdaq on Thursday posted their steepest one-day losses in two months.

However, shares in Amazon ( AMZN ) and Intel ( INTC ) rose sharply in after-hours trading following their earnings reports on Thursday, but Apple shares dipped. Traders will likely play it safe ahead of U.S. employment data on Friday and ahead of the weekend.

There's a sprinkling of potentially market-moving events in Asia on Friday, namely purchasing managers index reports from several countries including China, Indonesian inflation, and Japanese earnings from Mitsui ( MITSF ), Nomura, Mitsubishi ( MSBHF ) and others.

Perhaps more importantly though, the so-called 'bond vigilantes' are flexing their muscles again, pushing up yields across the developed world - with the possible exception of Canada - in an attempt to enforce some degree of discipline on what they consider fiscally lax governments.

A bearish narrative coalescing around three main facets - fiscal slippage, huge debt supply coming down the pike, and sticky inflation resulting from higher spending - is dominating bond market sentiment right now.

Yields are on the rise, with UK gilts feeling the heat most in the last 24 hours following Chancellor Rachel Reeves' debut budget on Wednesday. And on Thursday, the Bank of Japan kept rates on hold but left the door open to a near-term hike.

For markets in Asia, U.S. bonds are what matter most. And only days away from the U.S. presidential election the signs are flashing amber, if not red - implied volatility and the 'term premium' are the highest in a year, and the 10-year yield has risen more after the first cut in this Fed easing cycle than any since 1989.

If that wasn't bad enough for Asian markets, the dollar just clocked its biggest monthly rise in two and a half years. Most Asian stock markets lost ground in October and the MSCI Asia/Pacific ex-Japan index fell 4.5%.

Chinese stocks lost more than 3% in October, perhaps unsurprising given the previous month's 21% rise, while the weak yen has helped Japan's Nikkei 225 index post a monthly gain of around 3%.

Given the nervous global backdrop, however, it would not be a surprise to see Japanese stocks retreat on Friday, regardless of the exchange rate.

Asia's main data point on Friday is China's 'unofficial' manufacturing PMI. This follows the Bureau of Statistics PMI reports on Thursday that showed manufacturing activity crept back into expansion territory in October for the first time since April.

Here are key developments that could provide more direction to markets on Friday:

- Reaction to Apple, Amazon ( AMZN ) results

- China PMI (October)

- Indonesia inflation (October)

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Dow, S&P 500 Snap Five-Month Winning Streaks
Dow, S&P 500 Snap Five-Month Winning Streaks
Nov 4, 2024
05:15 PM EDT, 10/31/2024 (MT Newswires) -- US stocks fell Thursday, dragged down by a post-earnings decline in Microsoft ( MSFT ) shares, while the Dow Jones Industrial Average and the S&P 500 posted their first monthly losses in six months. The Nasdaq Composite decreased 2.8% to 18,095.2 on the day, while the S&P 500 retreated 1.9% to 5,705.5. The...
Morning Bid: Bond vigilantes flex muscles, tech tonic still fizzing
Morning Bid: Bond vigilantes flex muscles, tech tonic still fizzing
Nov 4, 2024
(Reuters) - A look at the day ahead in Asian markets.  Market sentiment in Asia will be fragile at best on Friday as high and rising bond yields sink their teeth into risky assets, and worries about escalating AI costs appear to slam the brakes on the megacap, Big Tech rally. There probably won't be any positive spillover from Wall...
GRAINS-Soybeans firm, set for second week of gains on strong demand
GRAINS-Soybeans firm, set for second week of gains on strong demand
Nov 4, 2024
SINGAPORE, Nov 1 (Reuters) - Chicago soybean futures rose for a third consecutive session on Friday, with the market on track for a weekly gain underpinned by strong demand for U.S. cargoes. Wheat inched higher although the market remained under pressure from improved U.S. planting weather, corn firmed. FUNDAMENTALS * The most-active soybean contract on the Chicago Board of Trade...
MORNING BID ASIA-Bond vigilantes flex muscles, tech tonic still fizzing
MORNING BID ASIA-Bond vigilantes flex muscles, tech tonic still fizzing
Nov 4, 2024
Nov 1 (Reuters) - A look at the day ahead in Asian markets. Market sentiment in Asia will be fragile at best on Friday as high and rising bond yields sink their teeth into risky assets, and worries about escalating AI costs appear to slam the brakes on the megacap, Big Tech rally. There probably won't be any positive spillover...
Copyright 2023-2026 - www.financetom.com All Rights Reserved