Australian Shares Slip from 14-Month Highs
The ASX 200 lost 15.10 points or 0.21% to 7045.60 on Monday, following losses of 0.26% last week after Perth entered a three-day lockdown on Friday after a breach at a hotel quarantine site. However, losses were limited following reports that iron ore prices hit near-record highs on strong global steel demand. BHP added 0.74% and Rio Tinto gain 1.3% while Fortescue Metals lifted 4.57%. Local 10-year bond yields lifted slightly from 8-week lows to 1.684%, while US 10-year rates were at 6-week lows of 1.572%. Meantime, earnings season has entered its last week, with highlights expected from, among others, South32, Northern Star, Fortescue Metals, and Newcrest. Market participants now await the release of the consumer price index for Q1, the US GDP reading for the March quarter, and the FOMC meeting later in the week.
New Zealand Dollar Trades at 5-Week Highs
The New Zealand Dollar added 0.0012 points or 0.17% to 0.72075 against the US Dollar Monday, trading at 5-week highs amid easing long term bond yields and sustained selling pressure on the Greenback. Local 10-year bonds yields were at monthly lows of 1.608% while US 10-year rates held near 5-week lows of 1.57% after data last week showed that US factory activity powered ahead in early April, while retail sales jumped to a record high in March and hiring accelerated. In local data, the annual inflation rate increased to 1.547% in Q1 last week, as the RBNZ noted that inflation this year is expected to be temporary only and monetary policy stimulus will remain in place. Markets will also focus on the US Federal Reserve Open Market Committee meeting to review monetary policy and the economy later this week.
Japan Equities Advance 0.5%
The NIKKEI 225 rose 131 points or 0.5% to 29,151 in afternoon trade on Monday after declining 2.26% in the prior week. Risk appetite was buoyed by the flow of strong US economic data, with new home sales racing to a more than 14-1/2-year high in March, and flash manufacturing PMI touching its highest on record in April. News that more than half of American adults have had at least one vaccine dose also encouraged traders to buy stocks. In local news, Japan on Friday declared states of emergency for Tokyo, Osaka, and two other prefectures, amid a surge of local virus infections. Investors now anticipate the BoJ’s monetary policy decision and the US FOMC meeting later this week. On the data front, Japan’s leading index hit its highest in over 2 years in February, while the coincident index was revised higher to 89.9 from a flash reading of 89.0 ANA Holdings jumped 5.4% after reporting a smaller-than-expected full-year loss. Tokyo Disney Resort operator Oriental also rose 2.5%.