Asian equites climbed on Friday tracking gains of Wall Street overnight.
Shares in Mainland China, South Korea and Hong Kong gained moderately while Japan gained by 2.09%. The MSCI Asian Index ex Japan gained 1.03%.
Japanese yen backtracked from tumbling staying near 20-year lows. The dollar dipped however is set for its best week sin 2021 ahead of Federal Reserve’s interest rate hike.
“The Fed’s record on soft landings is not that strong,” Carol Schleif, deputy chief investment officer at BMO Family Office LLC, said on Bloomberg Television.
“Markets are watching very, very carefully to see if we can thread that needle.”
The latest U.S. data showed that its economy unexpectedly shrank for the first time since 2020. That reflected an import surge tied to solid consumer demand, suggesting growth will return imminently.
The figures underscore the debate about how much scope the U.S. central bank has to tighten policy before the economy cracks. Markets continue to project a half-point Fed rate hike next week.
“A year from now, 10-year yields are most likely going to be lower than where we are today,” Jimmy Chang, chief investment officer at Rockefeller Financial LLC, said on Bloomberg Television, referring to Treasuries.
“I do believe at some point the economy starts to weaken, the Fed will be less hawkish, perhaps even go into a pause mode by, say, early next year.”
Treasuries were steady Thursday, leaving the 10-year U.S. yield at 2.82%. Treasury futures edged up. There’s no cash trading due to the Japan holiday.
Crude remained volatile with the WTI trading around $104 a barrel and the Brent trading around $107 a barrel as the traders weighing the prospect of a European Union ban on Russian crude.