Stocks rose on the last trading day of the quarter amid optimism over spending during China’s Golden Week holiday and on on talks of a possible meeting between US and China leaders. Treasuries and the dollar declined.
Hong Kong shares led equity gains in Asia, while benchmarks also advanced in Australia and New Zealand. Mainland markets are shut for a holiday through the end of next week. Adding to the positive sentiment is a Wall Street Journal report that China’s Vice Premier He Lifeng and Foreign Minister Wang Yi are discussing possible visits to the US to prepare for a potential summit between Xi Jinping and Joe Biden.
The MSCI ACWI Index — which includes equities in emerging and developed markets — has fallen 3.7% since the end of June, the biggest quarterly decline since September 2022. Sentiment toward equities has been sapped due the prospect that global interest rates will stay elevated for longer, while inflation is being supported by rising oil prices.
Futures for European stocks were little changed, along with those for the S&P 500 and Nasdaq 100 after the US indexes gained Thursday on the back of a rally in tech behemoths including Nvidia Corp. and Meta Platforms Inc.
Traders will be monitoring inflation data from the euro-zone later Friday. Headline and core inflation are likely to drop below 5% in September, easing pressure on the European Central Bank. “We expect the Governing Council will be able to deliver on the hint given on Sept. 14 that rates may have reached their peak,” said Maeva Cousin at Bloomberg Economics.
The UK economy expanded 0.6% from a year ago in the second quarter. The pound rose.
The Federal Reserve’s preferred measure of inflation — the personal consumption expenditures price index — is also due Friday.
September is still shaping up to be the worst month this year for US stock benchmarks and the poorest month for global bonds since February after the Federal Reserve left interest rates at the highest in 22 years at its most recent meeting.
Treasury yields rose in Asia after slipping from 16-year highs in New York following weaker-than-expected consumer spending data and dovish Fed comments. The US 30-year yield is on track for the largest quarterly increase since 2009.
The dollar weakened against all except one of the Group-of-10 peers Friday, but Bloomberg’s index of the US currency has still gained 2.6% this quarter. The euro advanced into a second day.
The yen briefly extended losses after the central bank announced an unscheduled bond-buying operation. The country’s 30-year bond yield climbed to the highest since 2013 amid upward pressure on global yields.
In the US, dovish-leaning comments from one policymaker and weak consumer spending data helped stoke hope for some easing of the Fed’s messaging. Even if the US enters a recession it should be able to skirt a more severe downturn, according to Richmond Fed President Tom Barkin. Chair Jerome Powell sidestepped investor concerns over the outlook for interest rates at an event.
Oil was steady, with Brent set for its best quarter since March 2022.
Key events this week:
- Eurozone CPI, Friday
- US consumer spending, wholesale inventories, University of Michigan consumer sentiment, Friday
- ECB President Christine Lagarde speaks, Friday
- New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 6:31 a.m. London time. The S&P 500 rose 0.6%
- Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.8%
- Japan’s Topix index fell 1.2%
- Hong Kong’s Hang Seng Index rose 2.6%
- Australia’s S&P/ASX 200 Index rose 0.4%
- Euro Stoxx 50 futures were unchanged
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.0579
- The Japanese yen was little changed at 149.34 per dollar
- The offshore yuan was little changed at 7.2955 per dollar
- The Australian dollar rose 0.5% to $0.6457
- The British pound rose 0.1% to $1.2221
Cryptocurrencies
- Bitcoin fell 0.5% to $26,964.66
- Ether was little changed at $1,655.15
Bonds
- The yield on 10-year Treasuries was little changed at 4.58%
- Japan’s 10-year yield advanced one basis point to 0.765%
- Australia’s 10-year yield advanced four basis points to 4.49%
Commodities
- West Texas Intermediate crude fell 0.1% to $91.59 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Rob Verdonck and Abhishek Vishnoi.
(A previous version was corrected for mentioning Korean stocks when Korea is shut for a holiday)
