Key Points:
- Mixed performance in Asian markets as trading resumes after Lunar New Year; MSCI Asia-Pacific index rises.
- SoftBank Group experienced a notable surge driven by Arm Holdings and Tokyo Electron gains.
- U.S. equity futures decline ahead of the release of January’s U.S. consumer price index (CPI) report.
- Key events scheduled for the week include Eurozone industrial production, GDP data, and various central bank speeches.
Asian markets experienced mixed performance as trading resumed after the Lunar New Year holiday. The MSCI Inc. Asia-Pacific equity index rose, driven by gains in Japanese and South Korean stocks. In South Korea, the Kospi index is poised to erase year-to-date losses, propelled by expectations of regulatory measures to boost the local stock market. Notably, markets in China, Hong Kong, Taiwan, and Vietnam remained closed for the Lunar New Year festivities.
Japan’s economy is anticipated to rebound, with a forecasted annualized growth of 1.2% in the fourth quarter after facing a contraction in the summer. SoftBank Group Corp. experienced a significant surge of up to 11% in early trading. This surge follows continued gains for Arm Holdings Plc, a company in which SoftBank holds a stake.
Arm shares rose 29.2% in New York trading on Monday and have nearly tripled since their listing in September. Additionally, Japanese chipmaking equipment manufacturer Tokyo Electron Ltd. saw its stock reach a record high due to robust sales performance.
The weakened yen has played a role in supporting Japanese stocks, contributing to the positive sentiment in the semiconductor sector. This boost is further fueled by a global demand for chips, driven by expectations of an impending artificial intelligence boom.
As markets await the release of January’s U.S. Consumer Price Index (CPI) report, U.S. equity futures exhibited a decline. The report is expected to show the first reading below 3% for year-over-year headline inflation since March 2021, aligning with the recent disinflation narrative that has supported equity market rallies.
In the latest market movements, S&P 500 futures experienced a slight decline of 0.1%, Nikkei 225 futures surged by 2.4%, and Japan’s Topix index rose by 1.9%. Australia’s S&P/ASX 200 remained relatively unchanged. Euro Stoxx 50 futures, however, decreased by 0.3%, and Nasdaq 100 futures dipped by 0.2%.
In currency markets, the Dollar Spot Index remained steady, with the euro holding firm at $1.0763 and the Japanese yen maintaining its position at 149.49 per dollar. The offshore yuan also saw minimal movement at 7.2224 per dollar, while the Australian dollar experienced a 0.2% decline, reaching $0.6519.
In the bond market, U.S. 10-year Treasury yields and Japan’s 10-year yield remained unchanged at 4.18% and 0.720%, respectively, while Australia’s 10-year yield advanced by two basis points to 4.18%. Lastly, West Texas Intermediate crude oil saw a marginal increase of 0.2% in commodities, reaching $77.09 a barrel, while spot gold prices remained relatively stable.
While Asian markets respond to various factors, including regulatory expectations, currency dynamics, and global economic indicators, the week ahead holds key events such as Eurozone industrial production and GDP data, the Bank of England Governor’s testimony, and important economic releases in the United States.
