Asia Set to Follow U.S. Equity Gain; Brazil Roiled: Markets Wrap – Bloomberg

Futures pointed to a stronger open for Japanese and Chinese equities after U.S. stocks rebounded with the dollar. Haven appetite diminished, even as a government crisis in Brazil weighed on commodities and raised the specter of emerging-market risk.

Japanese stock-index futures rose as the yen pared its strongest week in a month, while contracts on Australian and Korean benchmarks pointed slightly lower. The S&P 500 Index clawed back part of the biggest selloff in eight months spurred by turmoil in U.S. President Donald Trump’s administration. Gold maintained losses. Brazil’s currency, shares and bonds tumbled amid calls for that country’s leader to resign over an alleged cover-up.

Financial markets in the U.S. stabilized as the administration sought to move past controversies surrounding Russia that have threatened to ensnare its policy agenda. Risk sentiment was also helped by better-than-expected U.S. jobless claims and regional manufacturing data. The uptick helped drive the greenback up against all its major peers Thursday.

Read our Markets Live blog here.

What investors will be watching:

  • Federal Reserve Bank of St. Louis President James Bullard speaks to the Association for Corporate Growth at Washington University’s Knight Center in St. Louis.
  • The economic calendar is thin on Friday, with Malaysian GDP on tap in Asia.
  • Trump’s first foreign trip as president will be to Riyadh on Saturday, at the invitation of Saudi King Salman bin Abdulaziz. After Saudi Arabia, Trump visits Tel Aviv and Rome before heading to a NATO summit in Brussels and the G-7 meeting in Sicily.

Here are the major moves in the markets:

Stocks

  • Futures on the Nikkei 225 Index futures rose 0.1 percent in Singapore, and FTSE China A50 Index contracts were also 0.1 percent higher. Those tracking the S&P/ASX 200 and Kospi were down less than 0.1 percent.
  • S&P 500 futures were little changed as of 7:12 a.m. in Tokyo. The benchmark index rose 0.4 percent on Thursday after plunging 1.8 percent in the previous session, its worst day since Sept. 9. The Stoxx Europe 600 Index declined 0.5 percent, paring a drop that reached 1.2 percent.
  • Brazil’s Ibovespa Index tumbled 8.8 percent, the most since October 2008, as political crisis returned to the country after last year’s impeachment process.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.3 percent Thursday, reversing some of the selloff that took it to its lowest level since the U.S. election. The gauge is down 1 percent for the week.
  • The yen fell 0.1 percent to 111.58 per dollar after falling 0.6 percent on Thursday. The currency is up 1.6 percent for the week, its strongest performance in a month.
  • The euro is steady at $1.1101 after dropping 0.5 percent in the previous session. The pound held at $1.2938 after briefly jumping above $1.30 on Thursday.
  • Brazil’s real led declines among emerging-market currencies, slumping 7.5 percent on Thursday. The Mexican peso ended down 0.3 percent, paring an earlier drop of as much as 2.2 percent after the central bank unexpectedly raised its key interest rate.

Bonds

  • The yield on 10-year Treasuries ended Thursday little changed at 2.23 percent after earlier sliding to as low as 2.18 percent.
  • Bonds of Brazil’s state-controlled energy company Petroleo Brasileiro SA dropped by the most in six months amid the nation’s political crisis.

Commodities

  • Gold is steady at $1,247.06 an ounce after it fell 1.1 percent on Thursday to reverse part of its five-day rally. The metal is up 1.6 percent this week.
  • Copper dropped 0.5 percent on Thursday and zinc was down 1.1 percent as part of a broad move lower in base metals. Iron ore futures in China were higher.
  • West Texas crude was flat at $49.33. Oil is up 3.1 percent for the past five days, heading for a second weekly gain.

    Asia Set to Follow U.S. Equity Gain; Brazil Roiled: Markets Wrap – Bloomberg}

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