(Bloomberg) — Treasuries edged higher in Asian trading Friday while equities were mixed after a rally in the world’s largest technology companies drove a rebound in US stocks.
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The US 10-year yield fell more than two basis points, clawing back around half its losses from Thursday when yields rose for a second session. Data showed US producer prices increased in March from a year earlier by the most in 11 months, underscoring the resilience of the world’s largest economy.
Gold surged further in early Asian trading after climbing to a fresh record Thursday on the US inflation report.
Japanese stocks climbed as other major markets in the region struggled for traction. Australian and Hong Kong shares were lower, while Chinese equities rose in early trade.
US futures were steady after the S&P 500 climbed Thursday, while the tech-heavy Nasdaq 100 closed over 1.5% higher. A solid economy is expected to fuel a rise in profit growth for US companies — and strong margins from Big Tech will be a key driver.
“It’s not going to be Federal Reserve rate cuts that drive the market going forward, rather it’s going to be earnings,” said George Ball, chairman of Sanders Morris. “Corporate earnings are much stronger than people have anticipated even in this elevated interest-rate environment.”
In Asia, the yen was steady after further weakness Thursday. Traders will be monitoring the currency once more as Japanese authorities warned they will consider all options to combat weakness in the yen after it slumped to its weakest level against the dollar since 1990.
Investors will also be closely watching the offshore yuan after it advanced against the greenback for a fourth time in five trading sessions. The strengthening follows support from the People’s Bank of China on Thursday.
Fewer Rate Cuts
The 11-month high in US producer prices may have added to worries the economy is still running hot, but did assuage some concerns about the prospect of runaway inflation, according to Quincy Krosby, Chief Global Strategist for LPL Financial.
“The PPI headline number came in a touch lower than estimates helping markets ease fears of a broad based inflation assault on supply chain prices in addition to consumer prices,” she said.
Fed Bank of New York President John Williams said the central bank has made “tremendous progress” toward better balance on its inflation and employment goals, but added there’s no need to cut in the “very near term.” His Richmond counterpart Thomas Barkin said the US central bank still has work to do to contain price pressures and can take its time before cutting interest rates.
Earnings season in the US kicks into full swing Friday with a handful of US banks reporting. Wall Street projects S&P 500 members will show 3.8% annual growth in earnings per share for the first-quarter reporting period, data compiled by Bloomberg Intelligence show. Profits for the “Magnificent Seven” cohort — Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc., Nvidia Corp., Meta Platforms Inc. and Tesla Inc. — are on course to rise 38% in the first quarter, according to BI.
Elsewhere in Asia, the Bank of Korea left interest rates unchanged. Data set for release in the region includes industrial production in Japan, inflation in India and trade figures for China. Markets are closed in Indonesia, Thailand and Dubai.
Meanwhile, oil edged higher Friday after a decline in the previous session as a swelling of US stockpiles overshadowed the possibility of an attack on Israel by Iran or its proxies.
Key events this week:
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China trade, Friday
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US University of Michigan consumer sentiment, Friday
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Citigroup, JPMorgan and Wells Fargo due to report results, Friday.
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San Francisco Fed President Mary Daly speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 10:36 a.m. Tokyo time
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Nikkei 225 futures (OSE) rose 0.6%
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Japan’s Topix rose 0.5%
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Australia’s S&P/ASX 200 fell 0.3%
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Hong Kong’s Hang Seng fell 0.6%
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The Shanghai Composite rose 0.2%
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Euro Stoxx 50 futures rose 0.6%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0727
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The Japanese yen rose 0.1% to 153.08 per dollar
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The offshore yuan was little changed at 7.2554 per dollar
Cryptocurrencies
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Bitcoin fell 0.4% to $70,240.85
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Ether fell 0.3% to $3,512.49
Bonds
Commodities
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West Texas Intermediate crude rose 0.8% to $85.68 a barrel
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Spot gold rose 0.6% to $2,385.76 an ounce
This story was produced with the assistance of Bloomberg Automation.
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