(Bloomberg) — Asian stocks swung between gains and losses, with sentiment influenced by poor Chinese data and optimism over reports the country will start selling ultra-long bonds.
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Hong Kong’s equity benchmark climbed to the highest since August, and mainland China equities also rose. But shares in South Korea, Japan and Australia fell. China’s 1 trillion yuan ($138 billion) special bond issuance program will began Friday and eventually include 20-, 30- and 50-year debt. European stock futures were little changed.
News of the China planned debt issuance boosted sentiment after weak data from the country published over the weekend had led to initial Asian stock losses. The specter of further US-China trade tensions also weighed on equities with a report on how much President Biden is set to increase tariffs on Chinese electric vehicles.
“You are looking at a slightly muddied growth outlook” for China, Sonal Desai, chief investment officer at Franklin Templeton, said in an interview on Bloomberg Television. Regardless of who gets elected in the US presidential election in November, we are going to see an escalation of US-China trade tensions, he said.
Bloomberg’s dollar index and the euro were both little changed. Japanese bonds fell after the central bank offered to purchase a smaller amount of government debt than at a previous auction. The 30-year yield rose to its highest since 2011.
Potential major catalysts for markets this week include a policy rate decision from China on Wednesday and a US April inflation print the same day.
Investors will also continue to scrutinize comments from US officials for signs of how long the Federal Reserve will keep interest rates at elevated levels. Fed Bank of Dallas President Lorie Logan said last week it’s still too early to think about lowering borrowing costs, while Governor Michelle Bowman said she doesn’t expect it will be appropriate for the Fed to cut rates in 2024.
Read more: This Round of Inflation Data Will Matter Greatly: John Authers
The weak Chinese data weighed on oil Monday,…
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