(Bloomberg) — Asian stocks rose, bolstered by shares of commodity-related firms as the price of copper and gold both climbed to record highs. Optimism over eventual Federal Reserve interest-rate cuts supported the rally.
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The MSCI gauge of regional equities advanced for a seventh day, with the materials sector posting the biggest percentage increase. Japanese shares led gains in Asia, while those in China, Hong Kong and Australia also marched higher, as did European and US futures.
Traders refining bets on the Fed finally pivoting toward rate cuts has shaped trading across financial markets in recent days. The Dow Jones Industrial Average of blue chips closed above 40,000 for the first time on Friday, and optimism about US easing helped gold surge to an all-time high on Monday.
“The Japanese market is playing a bit of catch-up.,” said Masayuki Doshida, a senior market analyst at Rakuten Economic Research Institute. “While US stock prices are hitting all time highs, Japanese stocks have recovered only about a half of their losses from March to April.”
Investors are also keeping an eye on the Middle East after Iranian President Ebrahim Raisi died in a helicopter crash. President Raisi was seen as a favorite to eventually succeed Supreme Leader Ayatollah Ali Khamenei, who is the Islamic Republic’s top authority.
Bloomberg’s dollar index was lite changed, after dropping last week when data showed US inflation in April eased more than economists expected. A chorus of Fed officials are due to speak this week, including Governor Christopher Waller who is set to talk specifically about the US economy and monetary policy.
Japan’s benchmark 10-year bond yield climbed to the highest since 2013 amid speculation the central bank is committed to normalizing interest rates and supporting the struggling yen.
Developments in the Middle East have the potential to spur haven demand, even though oil was little changed in Asia on Monday.
Saudi Arabia’s King Salman Bin Abdulaziz will receive treatment for a lung condition, according to the state-run Saudi Press Agency. King Salman has led the world’s largest oil exporter since 2015. His son Crown Prince Mohammed bin Salman was set to meet Prime Minister Fumio Kishida, Japan’s government spokesman said the trip had been postponed due to concerns over the king’s health.
“While risk sentiment seems positive in Asia morning there could still be lingering fear that tensions in the Middle East could worsen and that can keep the crude prices a tad underpinned for now,” Maybank analysts including Saktiandi Supaat and Fiona Lim wrote in a note.
China’s latest attempt to bolster the nation’s beleaguered property market, announced on Friday, was seen by some analysts as a step in the right direction, though possibly too small to end the crisis. Bloomberg’s gauge of real estate developer shares dropped on Monday.
The week’s agenda includes economic activity readings in Europe as well as inflation prints in the UK, Canada and Japan. Policy decisions in New Zealand, Indonesia, South Korea and Chile are also due, while Nvidia Corp. is set to report earnings.
Some key events this week:
Thailand GDP, Monday
BOE Deputy Governor Ben Broadbent speaks on monetary policy transmission, Monday
Chile GDP, Monday
Reserve Bank of Australia issues minutes of May policy meeting, Tuesday
Canada CPI, Tuesday
Fed Governor Christopher Waller speaks on the US economy and monetary policy, Tuesday
BOE Governor Andrew Bailey delivers a lecture, Tuesday
New Zealand rate decision, Wednesday
Indonesia rate decision, Wednesday
South Africa CPI, Wednesday
UK CPI, Wednesday
FOMC minutes from April 30-May 1 policy meeting, Wednesday
Singapore CPI, GDP, Thursday
South Korea rate decision, Thursday
India S&P Global Manufacturing & Services PMI, Thursday
Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, consumer confidence, Thursday
US new home sales, initial jobless claims, Thursday
Chile rate decision, Thursday
Japan CPI, Friday
Germany GDP, Friday
Malaysia CPI, Friday
US durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 1:06 p.m. Tokyo time
Nikkei 225 futures (OSE) rose 1.2%
Japan’s Topix rose 0.9%
Australia’s S&P/ASX 200 rose 0.7%
Hong Kong’s Hang Seng rose 0.5%
The Shanghai Composite rose 0.4%
Euro Stoxx 50 futures rose 0.4%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0879
The Japanese yen was little changed at 155.73 per dollar
The offshore yuan was little changed at 7.2381 per dollar
Cryptocurrencies
Bitcoin rose 0.8% to $66,708.49
Ether rose 0.5% to $3,090.08
Bonds
Commodities
West Texas Intermediate crude was little changed
Spot gold rose 0.9% to $2,438.16 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Matthew Burgess and Hideyuki Sano.
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