SHANGHAI (Reuters) – Asian equities moved between small losses and gains on Friday as investors waited for important trade and lending data in China and worries over tensions between China and the US counteracted optimism in China expectations of a rate cut this month.
FILE PHOTO: Passersby pass by on an electrical screen on July 1, 2019 in Tokyo, Japan, where the indices of the Asian markets are displayed outside of a broker. REUTERS / Issei Kato
Later on Friday, China will release trade data for June. Analysts expect this The decline in exports due to weakening global demand and a sharp increase in US tariffs has hit the world's largest trading nation more severely.
China will also release data on lending on Friday, while second-quarter GDP figures are scheduled for Monday. It is expected that the world's second largest economy has slowed to the slowest pace in at least 27 years, raising hopes of more incentives to ward off a stronger slowdown.
"You've published important data, and I do not understand why someone wants to take a position until you get that data," said Michael Every, director of Asia-Pacific financial research at Rabobank in Hong Kong.
"We have a hell of a lot of signal through, but until we get the signal, that's the noise," he said.
MSCI's broadest index for Asia-Pacific equities outside Japan .MIAPJ0000PUS recently gained 0.1%. Chinese stocks rose, with the CSI300 .CSI300 gaining 0.7%.
Australian equities fell 0.1% and the Japanese Nikkei stock index .N225 rose after small early losses, gaining 0.14%.
South Korea's KOSPI .KS11 rose 0.37%.
As a testament to the economic impact of global trade tensions, Singapore's economy grew the slowest in a decade during the second quarter, when electronics manufacturing production declined for the sixth consecutive time in May and exports saw their biggest decline in more than three months ,
In the midst of global slowdown, US Federal Reserve Chairman Jerome Powell announced Thursday that a rate cut is likely at the next Fed meeting.
The bids for such a cut remained strong despite a rise in US consumer price inflation in June, contributing to the S & P 500 index gain 0.23% on Thursday and a record high of 2,999.91 points recorded.
While the Nasdaq Composite .IXIC fell 0.08%, the Dow Jones Industrial Average .DJI reached a record high of 27,088.08, rising 0.85% that day.
S & P 500 E-Mini Futures ESc1 rose 0.24% to 3,011.25.
But a tweet from US President Donald Trump on Thursday, in which he said China did not live up to the promises it made when buying farm produce from American farmers, threatened to revive worries about trade.
"Since the announcement of the ceasefire and the resumption of trade talks at the G20 meeting, the markets in the US-American trade war saga have calmed down a bit. Unfortunately, headlines appear again, "wrote the analysts of ANZ in a morning note.
"Although this was not a big market driver, it serves as a reminder that things could flare up again," they said.
WEAK TREASURE AUCTION
US. Government bond yields rose on Thursday after demand for a $ 16 billion 30-year auction of bonds was weak and the consumer price index excluding food and energy was up 0.3% in June. This was the largest increase since January 2018.
The poorly-received auction had boosted the 30-year yield on Thursday to 2.672%, according to Refinitive.
On Friday, however, yields barely changed. Benchmark 10-year Treasury Notes US10YT = RR recently returned 2.1291% after a US close of 2.12% on Thursday, while the 30-year yield hit 2.666% after a 2.639% close.
The two-year yield US2YT = RR, which rises with traders' expectations of higher Fed interest rates, remained unchanged at 1.8524%.
"The VPI report will have no material impact on the Fed's guidance and will not have a significant impact on the big Fed debate around 25 or 50," said Stephen Innes, Managing Partner at Vanguard Markets Pte, citing the expectations regarding the size of a rate cut in July.
"After all, the FOMC is clearly ready to accelerate inflation after spending most of a decade igniting these flames," he said.
The dollar fell 0.05% against the yen to 108.43 JPY = while the euro EUR = gained 0.12% to buy 1.1265 $.
The dollar index .DXY, which tracks the greenback against a basket of six major competitors, fell 0.08% to 96,970.
Oil prices picked up as US oil producers in the Gulf of Mexico slashed production by more than half in the face of a tropical storm and continued tensions in the Middle East.
The global reference value for Brent crude LCOc1 rose 0.60% to $ 66.92 a barrel. The US West Texas Intermediate (WTI) CLc1 crude rose 0.58% to $ 60.55 a barrel.
Gold prices, which were dampened by stronger-than-expected US consumer inflation data, returned to luster thanks to renewed trade fears and interest rate cuts. Spot Gold XAU = last traded plus of 0.28% at $ 1,407.60 per ounce.
Reporting by Andrew Galbraith; Editors of Shri Navaratnam and Richard Borsuk