Tuesday August 30, 2016
08:14 AM GMT+8

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US crude was around US$47 a barrel after sliding 1.4 per cent yesterday as doubts emerged that producers won’t be able to forge a deal to stabilise the market at a meeting next month. — Reuters picUS crude was around US$47 a barrel after sliding 1.4 per cent yesterday as doubts emerged that producers won’t be able to forge a deal to stabilise the market at a meeting next month. — Reuters picWELLINGTON, Aug 30 — Futures on Asian stock indexes outside of Japan foreshadowed gains following a rebound in the US, as investors focus on evidence of strength in the world’s largest economy and mull prospects for global monetary policy. Oil was steady after pulling back.

Contracts on equity gauges in Australia, South Korea and Hong Kong rose at least 0.3 per cent in most recent trading, while futures on Japan’s Nikkei 225 Stock Average diverged after the yen failed to build on Friday’s selloff. Australian government debt tracked a rebound in Treasuries as copper futures climbed for only the second time in eight days. US crude was around US$47 (RM189.80) a barrel after sliding 1.4 per cent yesterday as doubts emerged that producers won’t be able to forge a deal to stabilise the market at a meeting next month.

US equities snapped a three-day decline last session after a report showed consumer spending rose for a fourth straight month in July, bolstered by stronger income gains. Monthly jobs data on Friday may provide more clues as to whether American policy makers have room to boost rates after Federal Reserve Chair Janet Yellen said the case for a hike is getting stronger. Meanwhile, central bankers in Europe and Japan used the Jackson Hole conference at the weekend to reaffirm their commitment to economic stimulus.

“Markets look to be steadily adjusting into a holding pattern as they await the nonfarm payrolls report,” Angus Nicholson, a market analyst in Melbourne at IG Ltd, said in an e-mail to clients. “The strong session in US equities overnight looks like it will be a boon for Asian markets.”

Japan releases a swathe of economic data today, with retail sales to follow figures on household spending and the jobless rate. Australia updates on building approvals, an index of manufacturing in Thailand is due and Malaysia reports on money supply. Bank of Korea meeting minutes are also scheduled to be released.

Stocks

New Zealand’s S&P/NZX 50 Index, the first major stock gauge to start trading each day, added 0.2 per cent as of 8:35am Tokyo time, rising for the first time in three days. Futures on the S&P 500 Index climbed 0.1 per cent to 2,180.25, after banks and mining companies drove the US benchmark up 0.5 per cent, ending a three-day drop, its longest run of losses since June.

Futures on Australia’s S&P/ASX 200 Index were 0.3 per cent higher as were those on the Kospi index in Seoul. Contracts on Hong Kong’s Hang Seng Index gained 0.3 per cent as futures on the Hang Seng China Enterprises Index rose 0.4 per cent. FTSE China A50 Index futures added 0.3 per cent.

The MSCI Asia Pacific Index slipped 0.3 per cent yesterday, trimming its August advance to 1.1 per cent as most major markets, except for Japan, retreated.

Nikkei 225 Stock Average futures were bid for 16,720 in the Osaka pre-market, down from 16,730 at their close in Japan last session, while yen-denominated contracts on the gauge gained 0.1 per cent to 16,715 on the Chicago Mercantile Exchange. Nikkei futures traded in Singapore were down 0.1 per cent to 16,715.

Bonds

Australian and New Zealand bonds picked up where the Treasury market left off, with yields on both countries’ 10-year notes falling at least five basis points. Rates on Treasuries due in a decade slipped seven basis points yesterday, to 1.56 per cent, after jumping five basis points last week.

Yellen’s speech at the Jackson Hole gathering last Friday shifted the spotlight to this week’s August labour report, which is projected to show employers added 180,000 jobs to nonfarm payrolls in the US, following a gain of 255,000 in July.

“They’re likely to tighten in September, at least as long as the jobs number comes in OK,” Michael Pond, head of global inflation market strategy at Barclays Capital Inc in New York, said on Bloomberg Television. “Hawkish Fed rhetoric has certainly increased recently. It’ll take a decent number, like 200,000, for them to go.”

Fed fund futures indicate a 36 per cent chance that the Fed will raise rates next month, up from 22 per cent on August 19 and zero in late June after the UK voted to leave the European Union. The odds of an increase in US borrowing costs by December have risen to 61 per cent from a low of 8 per cent reached June 27.

Commodities

West Texas Intermediate crude edged up 0.1 per cent to US$47.01 a barrel, after dipping below that level yesterday trading.

US oil stockpiles probably rose by 1.5 million barrels last week, according to analysts surveyed by Bloomberg before Energy Information Administration data due tomorrow. A tropical depression near Florida that is expected to become a storm by today is forecast to veer away from the energy-rich western Gulf of Mexico, according to the National Hurricane Centre.

Copper futures for December delivery added 0.2 per cent to US$2.0840 a pound, after slipping 0.3 per cent last session.

Gold for immediate delivery was steady at US$1,323.15 an ounce following a 0.2 per cent spike higher yesterday. The precious metal declined 1.5 per cent last week as the prospect of a 2016 rate hike in the US diminished gold’s allure. — Bloomberg

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