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Asian Stocks Up, but Inflation Concerns Return

Asia Pacific stocks were mostly up on Monday morning. However, volumes were thin as two major markets closed in the region. Moreover, inflation concerns were re-emerging.

At the close of the previous session, the U.S Treasury yields stood above the 1.6% mark. Inflation concerns were returning as U.S. economic data indicated potential inflation pressures.

It also signaled increased talk of a possible pullback in central bank support. Economic data includes GDP and initial jobless claims released during the previous week. 

Investors also worry that central banks could start tapering their asset purchase programs. These programs have supported the recovery earlier than anticipated.

Signs of excessive risk-taking tell it’s time to start debating a reduction in bond purchases. This was according to Federal Reserve Bank of Dallas President Robert Kaplan on Friday. That’s in direct contrast with the central bank’s current dovish policy, he added.

Investors were still eyeing the U.S central bank chairman’s comments later in the day. Other Federal Reserve officials will give their comments later in the week, as Kaplan currently does not hold a vote on the rate-setting committee.

Stocks on the Move

 

Chinese and Japanese markets were shut for a holiday. Due to this, volumes were low, and Asian share markets got off to a slow start on Monday. Expected this week is a raft of data that should show the U.S. leading a global economic recovery.

All but the flat was MSCI’s broadest index of Asia-Pacific shares outside Japan. It previously took a bit of a spill on Friday. Though Japan’s Nikkei was shut for a holiday, the Nikkei futures edged up 0.2%.

With Nasdaq futures and S&P 500 futures both up 0.3%, Wall Street extended its bull run.

By 10:30 PM ET (2:30 AM GMT), Australia’s ASX 200 edged up 0.14%. This was ahead of the Reserve Bank of Australia’s policy decision due to be handed down on Tuesday. 

Earlier in the day, the Australian Industry Group released its April manufacturing index. It was at 61.7, higher than March’s 59.9 reading.

South Korea’s KOSPI ticked up 0.05%, while Hong Kong’s Hang Seng Index slipped 1.45%. 

Investors and markets expected strong ISM manufacturing survey and April payrolls. Forecasts showed 978,000 job openings in the month. Moreover, consumers spent their stimulus money, and the economy opened up more.

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