SYDNEY- Asian shares looked to end the month on a firm note on Monday in a week littered with major economic releases, central bank meetings and earnings updates from mega caps Amazon and Apple, though rising Japanese bond yields posed a risk.
China surveys were mixed with factory activity just pipping forecasts but services disappointing, though both merely reinforced expectations that Beijing would have to launch larger stimulus at some point.
Chinese blue chips seemed unperturbed and added 1.6 percent , bringing gains for July to 5.6 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.1 percent , having gained almost 6 percent so far in July to reach a five-month high.
The initial impetus for markets was positive following Friday’s US data showing an easing in wage costs and core inflation, which fueled hopes the Federal Reserve was done tightening.
“The data surprises bolster confidence that global core inflation – ex. China – will fall sharply and set the stage for a developed market central bank policy pause and emerging market easing even if growth remains firm,” said Bruce Kasman, head of economic research at JPMorgan.
Figures due this week include the US ISM surveys on manufacturing and services, the July payrolls report and European inflation.
The Bank of England is widely expected to raise rates by at least a quarter point, but markets are more divided on whether the Reserve Bank of Australia will hike or stay on hold.
Almost 30 percent of the S&P 500 report results this week and so far, earnings have been good enough to see the index extend its rally to 10 percent since the start of June.
S&P 500 futures added another 0.1 percent on Monday, bringing its gains for July to almost 3 percent , with Nasdaq futures near flat.
Apple Inc and Amazon.com both report on Thursday, while other well-known names with results due include Western Digital Corp Caterpillar Inc Starbucks Corp and Advanced Micro Devices
Japan’s Nikkei rose 1.8 percent to re-take the 33,000 level and nudge closer to its recent three-decade peak.
Investors are still pondering the implications of Friday’s shock decision by the Bank of Japan (BOJ) to lift the lid on bond yields, in a step away from its ultra-easy policies. – Reuters
