The dollar headed for the best week this year on hopes U.S. tax reform will aid economic growth. Asian stocks headed for a mixed start on the final trading day of what’s been a strong quarter, with emerging markets coming under pressure.
Australian and Hong Kong equity-index futures signaled higher opens ahead of long weekends, while Japanese shares were poised to edge lower. The S&P 500 Index eked out all-time highs and the Russell 2000 Index of smaller companies extended its quarterly surge. End-of-quarter volatility would not be a surprise on Friday and some major markets, including China, will shut next week for a holiday. Oil slipped after climbing into a bull market this week.
The chances of higher U.S. interest rates by the end of the year now sit at about 65 percent, as investors bet the world’s largest economy can handle tighter policy, sending equities higher and driving money out of gold. Trump’s tax plan, which still needs approval from Congress, currently lacks detail, leaving investors guessing which parts of the package will be prioritized by the administration.
While the Bloomberg Dollar Spot Index has done well this week on the back on the tax proposal, it’s still headed for a third straight quarterly drop, pushing its loss in 2017 above 8 percent. Gold traded near the lowest since August, on track for the worst month of the year.
Terminal subscribers can read more in our Markets Live blog.
What to watch out for prior to the weekend:
- Japan August industrial production and retail sales are due Friday as is South Korea’s current account balance for August.
- The euro-area inflation rate may have accelerated a touch to 1.6 percent in September from 1.5 percent but the core will probably remain at 1.2 percent. The data is out on Friday.
Here are the main moves in markets:
- Futures on the S&P 500 were little changed as of 7 a.m. in Tokyo. The underlying gauge added 0.1 percent to a record 2,510.06. The Russell 2000 climbed 0.3 percent.
- Contracts on the Nikkei 225 Stock Average are down slightly, while they were higher on the Australia’s S&P/ASX 200 Index. Hong Kong’s Hang Seng Index climbed 0.4 percent.
- The MSCI Emerging Markets Index lost 0.6 percent, a sixth day of losses.
- The MSCI Asia Pacific Index is down for six days in a row going into Friday.
- The Bloomberg Dollar Spot Index dipped 0.2 percent.
- The yen was at 112.35 per dollar.
- The euro was at $1.1784 after advancing 0.4 percent.
- The yield on 10-year Treasuries was at 2.31 percent.
- West Texas Intermediate crude was at $51.59 a barrel. Oil fell 1 percent in the Thursday session, reversing course after touching the highest level since April earlier in the session.
- Gold was little changed at $1,286.82 an ounce.