published Jan 15, 2018, 6:32:31 PM, by Adam Haigh
(Bloomberg) —

Asian equities’ best start to a year since 2006 took a breather Tuesday in the absence of fresh catalysts to spur the rally on. The dollar halted its slide and Treasuries inched lower as the U.S. bond market reopened after the Martin Luther King Jr. holiday.

The MSCI Asia Pacific index slipped as a decline in materials and energy stocks weighed. Japanese shares were little changed and remained close to multi-decade highs. South Korean stocks were flat and Australian equities declined. Focus remains on China’s yuan, trading at the strongest level in more than two years and prompting speculation about possible steps to cool its gains. The euro maintained gains after comments from ECB Governing Council member Ardo Hansson on the prospect of a September end to bond purchases.

Weakness for the greenback is extending into a sixth week despite a backdrop of solid U.S. economic growth. Traders appear to be more excited by potentially hawkish policy shifts from central banks in Europe and Japan, the improving political outlook in the euro area, and the synchronized nature of global expansion that’s also propelling emerging-market economies and assets.

Elsewhere, Brent crude reached the highest in three years in London as OPEC members called for output curbs to continue. Industrial metals gained, led by copper.

Here’s what to watch out for this week:

Earnings season ramps up: Taiwan Semiconductor Manufacturing Co., ASML Holdings NV, Bank of America Corp. and Goldman Sachs Group Inc. are among some notable releases. Industrial production in the U.S. probably increased in December, a report may show Wednesday, completing a solid year for manufacturing. U.S. housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release. The Bank of Canada’s interest-rate decision comes Wednesday. Monetary policy announcements are also this week due in South Korea, South Africa and Turkey. China releases fourth quarter GDP, December industrial production and retail sales Thursday.

And these are the main moves in markets:

Currencies

The Bloomberg Dollar Spot Index edged higher as of 9:14 a.m. on Tuesday after declining 0.6 percent Monday toward the lowest in three years. The euro traded at $1.2266, near the strongest in more than three years. The pound was flat at $1.3793, near the strongest since June 2016. The yen slipped 0.2 percent to 110.78 per dollar after hitting the strongest in more than four months on Monday.

Stocks

Japan’s Topix index rose 0.1 percent and Australia’s S&P/ASX 200 Index dropped 0.5 percent. South Korea’s Kospi index declined 0.5 percent. Futures on Hong Kong’s Hang Seng Index added 0.1 percent after yesterday coming close to its all-time high reached in 2007. Futures on the S&P 500 Index remained 0.2 percent higher, with American equity markets poised to reopen Tuesday after the holiday.

Bonds

The 10-year yield on Treasuries held at 2.55 percent as markets reopened following the holiday. Australia’s 10-year yield added more than one basis point to 2.79 percent.

Commodities

West Texas Intermediate crude increased 0.7 percent to $64.72 a barrel, reaching the highest since 2015. Gold rose 0.1 percent to $1,340.72 an ounce, the highest in more than four months.

–With assistance from Sid Verma.To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net Cormac Mullen
COPYRIGHT
© 2018 Bloomberg L.P