On Tuesday (October 29th), Asian stock markets showed mixed performances, with investors eagerly awaiting the start of a three-day earnings week for tech giants on Wall Street, with Google's parent company Alphabet set to take the stage later in the day.
The Nikkei 225 index rose by 0.77%, closing at 38,903.68 points, continuing the 1.82% increase from the previous trading day. The Hang Seng Index in Hong Kong increased by 0.5%, having climbed as much as 1.6% in the morning session. China's mainland blue-chip index fell by 0.75%, reversing an earlier gain of 0.68%. Chinese investors are focusing on a high-level meeting next week, hoping to gain more detailed information about Beijing's stimulus measures.
S&P 500 index futures were flat, with the index having risen by 0.26% the previous trading day.
The earnings reports of the "tech seven giants" are the focus of Wall Street this week. Meta and Microsoft will release their earnings reports on Wednesday, while Apple and Amazon will make their appearances on Thursday.
"The market lacks momentum, and it is not wise to chase highs at this time," said IG market analyst Tony Sycamore. "We are in a very tricky period. There is no point in chasing risk at this juncture."
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In other news, the US dollar is approaching a three-month high, with the JOLTS job openings report, favored by the Federal Reserve, set to be released on Tuesday, and the much-anticipated non-farm payroll data to be published on Friday. US Treasury yields have slightly retreated from their three-month highs.
The US dollar remained largely stable against six major currencies, including the yen and the euro, with the US Dollar Index at 104.29, having touched 104.57 earlier, the highest since last Wednesday and the loftiest value since July 30th. The euro held at $1.0811, while the British pound slightly fell by 0.05% to $1.29655.
Recent strong US economic data (including a robust job market) has diminished market expectations for the Federal Reserve to ease policy this year, thereby supporting the US dollar.
After a significant drop on Monday, the yen stopped falling and rose on Tuesday due to the uncertain outlook of the Japanese government. As a result, the Nikkei index was cautious at the open and then continued the upward trend from the previous trading day.
The US dollar fell by 0.23% against the yen, to 152.92 yen, although it had reached its highest level since July 31st at 153.885 yen on Monday.In Japan, future joint negotiations may be necessary, which could lead to higher fiscal spending and increase the difficulty for the Bank of Japan to push for the normalization of interest rates.
The leader of the opposition People's Democratic Party stated on Tuesday that the central bank should not significantly adjust its ultra-loose monetary policy in the current situation where real wage growth is stagnant. The Bank of Japan will decide on policy on Thursday, and no changes are expected.
The 10-year U.S. Treasury yield fell back to 4.2661% on Tuesday, after reaching its highest level since July 11 at 4.3% on Monday evening.
"We expect the narrative of an outstanding U.S. economy to continue to dominate financial markets, thereby supporting U.S. Treasury yields and the U.S. dollar," said Carol Kong, a foreign exchange strategist at the Commonwealth Bank of Australia.
In the commodity sector, given that the situation in the Middle East did not worsen further, crude oil prices plummeted on Monday. Brent crude futures fell by 0.18%, trading at $71.29 per barrel, while U.S. WTI crude fell by 0.19%, trading at $67.25 per barrel. Both fell by 6% on Monday, reaching their lowest levels since October 1.
Gold rose by 0.5% to around $2,755, approaching last week's historical high of $2,758.37.
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