Asia stocks stagger up from lows, Futures Climb on Dip Buying; Dollar Slips

23/08/2021 Asia-pacific shares bounced on Monday as bargain-hunters swept beaten-down markets, while weighing risks from the delta virus strain and China’s regulatory curbs. Shares climbed in Japan, Hong Kong and China. U.S. equity futures were in the green after an advance in the S&P 500 and tech-heavy Nasdaq 100 at the end of last week. Treasury yields ticked up and the dollar dipped. Investors are also looking ahead to the Jackson Hole symposium Thursday, which may offer insights into how the Federal Reserve plans to taper bond purchases. Tencent’s weekly sales rose 7% on new game releases and downloads. The tech-stock is currently up almost 3% in Hong Kong this morning.

Oil futures rose 1.75% on Monday, rallying with commodities and equities in Asia. Brent crude futures climbed 1.78%, to $66.34 a barrel, while West Texas Intermediate crude futures for October rose 1.72% to $63.20 a barrel, recovering from $61.74, the lowest since May 21, touched in Asia’s early trade.

Gold rose as investors awaited the annual Jackson Hole event later this week for more insight into the Federal Reserve’s policy outlook. Robert Kaplan, Dallas Fed President, said he’s open to adjusting his view that the central bank should start tapering its asset-purchase program sooner rather than later if the delta strain persists and hurts economic progress. Spot gold rose 0.35% to $1,787.30 an ounce. The Bloomberg Dollar Spot Index dropped 0.2%. Silver and platinum advanced, while palladium climbed more than 1.75% after posting the biggest weekly drop since March 2020.

Here are some events to watch this week:
• U.S. Markit manufacturing PMI and existing home sales Monday
• Fed officials attend the Jackson Hole Economic Policy Symposium from Thursday through Saturday
• U.S. GDP, initial jobless claims Thursday
• July U.S. personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.

On Friday the JSE slipped 0.15% to closed at 66,011 points while the Top-40 closed flat 0.09%. Retailers and miners led minor losses on the JSE on Friday, with the all share falling 4.86% this week. Retailers fell 2.09% and precious metals 2.7%. Rand firmer to the dollar 0.40% to R15.23/$, Yield on 10-year govt rand bonds little changed at 9.31 %. Top-40 futures +443 points this morning, looking forward to a positive start to the day at the opening bell.

Inflammatory messages on social media calling for violence and a countrywide shutdown on Monday, 23th, have prompted security forces to put plans in place to ensure stability, according to South Africa’s National Joint Operational and Intelligence Structure.

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• 30: June Mining Production MoM, est. 1.5%, prior -3.5%
• 30: June Mining Production YoY, est. 21.1%, prior 21.9%
• 30: June Platinum Production YoY, prior 27.0%
• 30: June Gold Production YoY, prior 44.5%

European shares edged higher on Friday, pan-European STOXX 600 index was up 0.3%. The index slumped 1.5% a day prior, tracking a fall in global equities. Marks & Spencer jumped 14% as it hiked its profit outlook after a jump in demand for food and a surge in online clothes’ orders indicated that its latest turnaround plan was starting to deliver. Supermarket Morrisons jumped 4.23% after agreeing a takeover offer worth £7bn. London’s FTSE 100 index rose 0.4%, while Germany’s DAX was up 0.3%.

Wall Street firmed up on Friday as dip buyers piled in after a volatile week of trading. The benchmark S&P 500 Index closed up 0.8%, its biggest gain in nearly three weeks. The Dow bagged 225 points, 0.61% at the close, while the Nasdaq advanced 1.20%. Most Federal Reserve officials agreed the central bank could begin tapering its bond-buying program in 2021, according to minutes from the Federal Open Market Committee’s July 27-28 gathering. But the rapid spread of the delta variant has prompted many analysts to question whether Chair Jerome Powell will follow that timeline. U.S futures, three main benchmarks, are all positively in the green this morning.

Japan’s Nikkei share average jumped on Monday after plunging -to an eight-month low in the previous session, as auto-related stocks rebounded from losses stoked by Toyota Motor’s announcement that it would slash its global production by 40% in September. The Nikkei rose 1.80%.

Australian shares rose on Monday, led by mining and technology stocks, as upbeat annual results from Event Hospitality & Entertainment and plumbing firm Reliance Worldwide lifted risk appetite in the final week of the corporate earnings season.
The S&P/ASX 200 index was up 0.31%.

Hong Kong’s Hang Seng surged 1.81%, while the Shanghai Composite gained 1.00%