Asian Futures Climb Before China Output Data as Oil Slips

by **Cals** Tue 10 Sep 2013, 08:01

Asian Futures Climb Before China Output Data as Oil Slips
By Emma O’Brien & Jonathan Burgos - Sep 10, 2013 7:41 AM GMT+0800

Asian stock-index futures rose, indicating the benchmark gauge may extend its longest rally this year, before Chinese factory output and retail sales data. The yen held declines and crude oil slipped a second day.

Nikkei 225 Stock Average futures were bid at 14,320 in the Osaka pre-market, from 14,325 inChicago and 14,220 in Japan yesterday, while contracts on Australian shares climbed 0.2 percent. Standard & Poor’s 500 Index (SPX) futures gained 0.1 percent after the gauge increased 1 percent in New York. The yen was little changed at 99.70 per dollar after slipping 0.5 percent yesterday and rupee forwards climbed. West Texas Intermediate oil sank 0.9 percent, while platinum and palladium rose.

Chinese industrial production and retail sales reports today will probably add to signs the world’s second-largest economy is rebounding, with factory output projected to have grown at the fastest pace this year in August, according to a Bloomberg survey. The Bank of Japan also issues minutes of last month’s meeting. The MSCI Asia Pacific Index climbed an eighth day yesterday to an almost four-week high. Crude fell amid prospects Russia may get Syria to give up its chemical weapons.

“The market should be pretty positive that industrial production in China is picking up,” Evan Lucas, a Melbourne-based markets strategist at IG Ltd., said by phone. “Positive indicators from China coupled what’s going in Japan really puts Asia back on track, making the region a very good investment case.”

Futures on the Hang Seng Index in Hong Kong climbed 0.4 percent in their most recent trading session, while contracts on the Hang Seng China Enterprises Index added 0.6 percent. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York rose a fifth trading day, increasing 1.8 percent to the highest level since Jan. 22.

Chinese Economy

Factory output in China expanded 9.9 percent from a year earlier in August, after rising 9.7 percent in July, according to the median of 45 estimates in a Bloomberg survey. Retail sales probably rose 13.3 percent on an annual basis, from 13.2 percent the previous month, a separate poll before today’s data shows. A report Sept. 8 fueled gains in global stocks and emerging-market currencies after it showed Chinese exports rose more than economists expected last month.

The yen was steady against the euro, losing 0.1 percent to 132.16 per euro, after depreciating 1 percent yesterday. Japan’s currency was the only decliner among 16 major peers tracked by Bloomberg against the greenback yesterday after Tokyo won the right to host the 2020 Olympics and second-quarter economic growth was revised up.

Dollar Index

The Bloomberg U.S. Dollar Index was little changed after falling 0.4 percent in New York.

New Zealand’s currency traded steady at 80.15 U.S. cents after a government report showed retail card spending rose a more-than-estimated 0.8 percent last month.

Australia’s dollar was little changed at 92.28 U.S. cents before National Australia Bank Ltd.’s August business confidence survey. Government bonds due in a decade yielded 4.09 percent, up two basis points, or 0.02 percentage point, after falling for the first time in six days yesterday.

One-month non-deliverable forwards on India’s rupee strengthened a fourth trading day, adding 0.8 percent to 64.85 per dollar. Local markets were closed for a holiday yesterday. The rupee strengthened 0.7 percent to 65.25 a dollar last week, its first climb in four weeks.

The S&P 500 climbed the most in five weeks yesterday amid almost $15 billion in takeovers involving U.S. companies.

Technology, industrial and commodity stocks rallied at least 1.2 percent to lead gains in all 10 of the main industry groups in the gauge.

U.S. Movers

Molex Inc. (MOLX), a maker of electronic components for products such as the iPhone, jumped 32 percent to a seven-year high of $38.63 after agreeing to be acquired by Koch Industries Inc. in a $7.2 billion deal. Neiman Marcus Inc., the Dallas-based luxury chain, agreed to sell itself to Ares Management LLC and the Canada Pension Plan Investment Board for $6 billion.

The U.S. market is poised for the busiest month of takeovers in more than six years. About $160 billion of mergers and acquisitions have been announced since the end of August, the most for a full month since July 2007, data compiled by Bloomberg show.

Apple Inc. rose 1.6 percent before an event today where the company is expected to introduce new models of the iPhone. Delta Air Lines Inc. rallied 9.4 percent as S&P Dow Jones Indices said the world’s second-largest carrier will replace BMC Software Inc. in the S&P 500.

Fed Tapering

U.S. Treasuries advanced a second trading day before reports this week projected to show growth in import costs and producer prices slowed as the economy struggled to gain momentum. Ten-year Treasury yields lost three basis points, or 0.03 percentage point, to 2.91 percent, while 30-year notes yielded 3.85 percent, down one basis point in New York.

The Federal Open Market Committee is scheduled to meet Sept. 17-18. The U.S. central bank will cut Treasury purchases that have fueled global asset gains to $35 billion from $45 billion, while maintaining mortgage-bond buying at $40 billion, according to the median of 34 responses in a Bloomberg survey released Sept. 6.

Kansas City Federal Reserve Bank President Esther George, who has consistently dissented against additional stimulus, said Sept. 6 that it would be appropriate to reduce the pace of purchases to $70 billion a month.

“Fed tapering remains a concern that could push market volatility higher,” IG’s Lucas said.

Crude Falls

The Kospi 200 Volatility Index, which tracks swings in South Korean shares, rose 2.8 percent yesterday to the highest level since July 24. The Nikkei Volatility Index slipped 6.3 percent, the most since July, as the Nikkei 225 jumped 2.5 percent.

WTI crude slipped to $108.57 a barrel today, following yesterday’s 0.9 percent slide in New York. Gasoline futures lost 0.3 percent, while contracts on natural gas added 0.4 percent.

U.S. President Barack Obama said a Russian proposal to convince Syria to give up its chemical weapons is a “potentially positive development,” while expressing skepticism on whether President Bashar al-Assad’s government will follow through. Obama has been striving to get Congressional support for military action against Syria.

Syria should give up its stockpile if doing so would help avoid a U.S.-led strike, Russian Foreign Minister Sergei Lavrov said after meeting his Syrian counterpart in Moscow yesterday. Syria “welcomes the Russia proposal,” Walid al-Muallem, the nation’s foreign minister, told reporters.

U.S. crude supplies probably fell to a one-year low as of Sept. 6 as imports slipped and refineries operated at more than 90 percent of capacity, according to a Bloomberg survey of energy analysts. The Energy Information Administration releases its report on stockpiles tomorrow.

Gold was little changed at $1,386.83 an ounce in early trading, after falling 0.4 percent yesterday and 0.2 percent last week. Platinum and palladium rose 0.2 percent.

To contact the reporters on this story: Emma O’Brien in Wellington at [You must be registered and logged in to see this link.]; Jonathan Burgos in Singapore at [You must be registered and logged in to see this link.]

To contact the editor responsible for this story: Emma O’Brien at [You must be registered and logged in to see this link.]