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Asian equities rise to extend quarterly rally: Markets Wrap

(Bloomberg) – Stocks in Asia rose after U.S. tech stocks posted gains on Wall Street, despite pressure on financial stocks after Federal Reserve officials reiterated their determination to bring inflation down.

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Stocks rose in Japan, South Korea and Australia, and futures on benchmarks in Hong Kong advanced, putting them on track to post their second straight quarterly gain. The S&P 500 rose 0.6% on Thursday, while the tech-heavy Nasdaq 100 rose 0.9%, pushing further into a bull market.

Treasury bonds were little changed and the dollar was weaker against major peers. Among the Group of 10 currencies, the yen was the biggest loser versus the greenback.

Wall Street’s gains came as market watchers digested a round of Fed comments suggesting further monetary tightening was needed, even after three US banks collapsed earlier this month. Boston Fed Chair Susan Collins said tightening was needed, while Richmond Fed Chair Thomas Barkin said the Fed could hike rates more if inflation risks remain.

Positive signals from China are helping the Bloomberg Commodity Index pare its quarterly loss, with oil clawing back half of the ground lost since early March. Most market watchers are still banking on China’s recovery underpinning a price rally later this year.

This optimism is also reflected in Chinese equities. Cainiao Network Technology Co., the logistics arm of Alibaba Group Holding Ltd., which is currently valued at more than $20 billion, has begun preparations with banks for its Hong Kong IPO. Meanwhile, shares of US competitor JD.com rose after two of its subsidiaries filed for IPOs in Hong Kong.

The story goes on

Friday’s trading could be choppy given quarter-end rebalances in pension funds and option hedging activity, but the outlook for US stocks in April is bullish, according to Scott Rubner, a managing director of Goldman Sachs Group Inc.

Investors expect US rates to be around 4.2% by the end of the year, around 80 basis points below current levels.

“You have to assume now that the game has changed and that the Fed will be more dovish,” Rick Rieder, BlackRock Inc.’s chief investment officer of global fixed income, told Bloomberg Television. “We are at very restrictive levels today.”

However, several strategists have said that despite US jobless claims rising for the first time in three weeks, markets are wrong to expect rate cuts this year as the job market remains resilient. And high inflation – as measured by the so-called PCE Core Deflator, which is due Friday – is expected to have persisted over the past month.

Back in Asia, FTSE Russell will keep South Korea on the watch list for inclusion in its global bond index – and India for the emerging market equivalent – thus lengthening countries’ wait time to jump into key market indicators.

Elsewhere, oil was trading near a two-week high. Gold has changed little.

Important events this week:

  • China PMI, Friday

  • Eurozone CPI, Unemployment, Friday

  • US Consumer Income, PCE Deflator, University of Michigan Consumer Sentiment, Friday

  • ECB President Christine Lagarde speaks on Friday

  • New York Fed President John Williams speaks on Friday

Some of the key movements in the markets:

Shares

  • S&P 500 futures were up 0.2% as of 9:01 a.m. Tokyo time. The S&P 500 rose 0.6%

  • Nasdaq 100 futures were up 0.2%. The Nasdaq 100 rose 0.9%

  • Japan Topix Index up 1%

  • Australia’s S&P/ASX 200 index rose 0.8%

  • Hong Kong’s Hang Seng futures rose 1%

currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro remained unchanged at $1.0905

  • The Japanese yen fell 0.4% to 133.28 per dollar

  • The offshore yuan was little changed at 6.8766 per dollar

  • The Australian dollar was little changed at $0.6717

cryptocurrencies

  • Bitcoin fell 0.4% to $28,040.33

  • Ether was little changed at $1,794.21

Bind

raw materials

  • West Texas Intermediate crude was little changed

  • Spot gold fell 0.1% to $1,978.08 an ounce

This story was created with the support of Bloomberg Automation.

–Assisted by Isabelle Lee and Carly Wanna.

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