(Bloomberg) — Asian stocks may struggle in early trading after Chinese economic measures underwhelmed and the release of anemic inflation data over the weekend. Bitcoin topped $81,000 after President-elect Donald Trump took a clean sweep of the seven US battleground states.
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Australian shares fell while futures in Tokyo and Hong Kong signal losses after China’s 10 trillion yuan ($1.4 billion) plan to help local governments deal with hidden debt stopped short of including new measures to boost domestic demand. US contracts edged higher after the S&P 500 rose 0.4% on Friday to cap stocks’ best week this year in anticipation of Trump’s pro-growth agenda.
A softer start is expected in Asia after the region’s stocks jumped 2.4% last week amid improved sentiment following the Federal Reserve’s rate cut and hopes for more stimulus in China. Investors are now shifting to assess how quickly Trump will implement his fiscal and protectionist trade policies, including proposed tariffs on China.
“The market’s next move will hinge on whether Trump prioritizes cutting taxes or raising tariffs, each having vastly different impact,” Tony Sycamore, an analyst at IG Markets in Sydney, wrote in a note. “This clarification may still be months away and it’s worth remembering that back in 2016, Trump’s first move was to cut taxes which sent stock markets surging before tariffs on China caused headwinds.”
Bitcoin surged past $81,000 for the first time in early Asia hours, after hitting a record $80,000 on Sunday, driven by the incoming president’s support for digital assets and the election of pro-crypto lawmakers.
Meantime, sentiment toward China is faltering as foreign direct investment slumps amid geopolitical tensions, competition from domestic industries and concerns over the nation’s economic outlook. Consumer inflation eased closer to zero in October, suggesting the government’s latest round of stimulus is far from sufficient to free the economy from the grip of deflation.
“Many feel that China is keeping its tactical powder in play for such time as the Trump-China tariff negotiations build, and they can respond in a more targeted fashion to stem the likely economic fallout,” Chris Weston, head of research at Pepperstone Group in Melbourne wrote in a note. “In the short-term, however, it does suggest downside risk to China/Hong Kong equity and the yuan.”
The dollar edged higher against major peers in early Asian trading, extending last week’s gain amid concerns that Trump’s fiscal policies will stoke inflation. While the US Treasury yield curve flattened Friday, firms including BlackRock, JPMorgan Chase, and TCW Group are warning that the bond market selloff is likely far from over. Cash Treasuries are closed Monday for a holiday.
Federal Reserve Bank of Minneapolis President Neel Kashkari indicated at the weekend the central bank could ease rates less than previously expected amid a strong US economy. Kashkari emphasized, however, that it’s too early to determine the impact of Trump’s policies.
Oil was little changed near $70 a barrel in early Asian trading after falling 2.7% on Friday amid disappointment over China’s stimulus measures. Gold was steady.
This week, traders will be parsing data from Australian jobs to Chinese retail sales and industrial production, inflation from the US and Eurozone as well as growth readings in the UK and Japan. A swath of Federal Reserve officials are scheduled to speak which may help indicate the central bank’s thinking following the election result.
Key events this week:
Japan current account, Monday
Denmark CPI, Monday
Norway CPI, Monday
United Nations climate change conference, COP29 begins, Monday
Germany CPI, Tuesday
UK jobless claims, unemployment, Tuesday
Fed speakers including Christopher Waller, Tuesday
Japan PPI, Wednesday
Eurozone industrial production, Wednesday
US CPI, Wednesday
Australia unemployment, Thursday
Eurozone GDP, Thursday
US PPI, jobless claims, Thursday
Reserve Bank of Australia Governor Michele Bullock speaks, Thursday
Fed Chair Jerome Powell speaks, Thursday
ECB President Christine Lagarde speaks, Thursday
BOE Governor Andrew Bailey speaks, Thursday
Japan GDP, industrial production, Friday
China retail sales, industrial production, fixed-asset investment, Friday
UK GDP, industrial production, trade balance, Friday
US retail sales, Friday
Alibaba earnings, Friday
Some of the major moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 8:25 a.m. Tokyo time
Nikkei 225 futures fell 0.9%
Hang Seng futures fell 1.6%
Australia’s S&P/ASX 200 fell 0.3%
Currencies
The euro was little changed at $1.0712
The Japanese yen fell 0.2% to 152.89 per dollar
The offshore yuan was little changed at 7.1980 per dollar
The Australian dollar was little changed at $0.6581
Cryptocurrencies
Bitcoin rose 0.6% to $80,386.76
Ether rose 0.4% to $3,184.06
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
