Dollar Eyes Best Week Since September; Stocks Rise: Markets Wrap
published Dec 7, 2017, 6:32:10 PM, by Adam Haigh
The dollar is poised for its biggest weekly gain since September as the U.S. tax reform bill made encouraging progress and ahead of employment data that’s expected to show hiring remains robust in the world’s largest economy.
Asian stocks opened higher following a broad-based rally in U.S. equities. Japan’s benchmarks advanced, buoyed by a weaker yen, which maintained a 0.7 percent slide. The Bloomberg dollar index looks like ending the week with a 1 percent gain after the passage of the U.S. tax bill through the Senate underpinned gains. The pound held on to an advance on speculation that Ireland and Britain were close to a Brexit deal. Gold was steady after extending this week’s slide to a four-month low.
Equities across the Asia-Pacific began rallying on Thursday after an eight-day losing streak saw investors booking profits following 2017 gains. This year remains on track to be the best since 2009 when stocks surged in the immediate aftermath of the financial crisis.
“We’ve had a terrific year in financial assets across the board,” Kenneth Taubes, chief investment officer of U.S. investment management at Amundi, which oversees about $1.6 trillion, told Bloomberg TV. “As we get towards the end of the year and valuations seem more extended than there were last year, it’s pretty natural that people want to lock in some profits.”
Stocks in the U.S. resumed their run-up tied to speculation that the U.S. tax overhaul will boost corporate profits. The S&P 500 Index ended a four-day losing streak, with industrial and consumer discretionary shares among the best performers. That follows a few days in which the markets drifted as investors awaited the details of a final bill. Meanwhile, Congress passed a two-week extension of federal funding that averts a government shutdown this week.
And the bitcoin frenzy continues. The cryptocurrency that has sparked so much debate went on a wild ride on Thursday. On Coinbase Inc.’s GDAX exchange, prices zoomed up to almost $20,000 from $16,000 in only about 90 minutes before crashing back down. The largest digital currency is still up more than 16-fold this year. It was trading above $16,000 in Asia.
Japan’s economy expanded in the third quarter more than initially reported, as business investment grew at a faster pace. Gross domestic product expanded an annualized 2.5 percent, beating an estimate 1.5 percent, and from a preliminary reading of 1.4 percent.
Elsewhere, Brazilian assets tumbled as the chances withered for an overhaul to the country’s pension system to be passed this year.
Here are some key events for the remainder of this week:
China reports on trade on Friday. U.S. employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report Friday may also show a bump up in average hourly earnings.
And these are the main moves in markets:
The Topix index climbed 0.5 percent as of 9:27 a.m. in Tokyo and the Nikkei 225 Stock Average rose 0.9 percent. Australia’s S&P/ASX 200 Index added 0.2 percent and the Kospi index in Seoul was also up 0.2 percent. Futures on Hong Kong’s Hang Seng Index rose 0.4 percent. S&P 500 futures were little changed. The cash measure rose 0.3 percent. The MSCI Asia Pacific Index gained 0.1 percent and is up 24 percent so far this year.
The Bloomberg Dollar Spot Index was little changed. The yen was flat at 113.13 per dollar. The euro was steady at $1.1773. The pound held around $1.3468 after climbing 0.6 percent.
The yield on 10-year Treasuries was steady at 2.37 percent. Australia’s 10-year yield climbed one basis point to 2.52 percent.
West Texas Intermediate crude was little changed at $56.60 a barrel. Gold was steady at $1,247.38 an ounce.
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