Reuters | Jan 18, 2021 10:40
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Nikkei off 0.8%, trade thinned by U.S. holiday
* China Q4 GDP rises 6.5% y/y, but retail sales miss
* US dollar, Treasuries hold gains as risk appetite sours
By Wayne Cole
SYDNEY, Jan 18 (Reuters) - Asian share markets pared early
losses on Monday as data confirmed China's economy had bounced
back last quarter as factory output jumped, helping offset
recent disappointing news on U.S. consumer spending.
Chinese blue chips .CSI300 edged up 0.4% after the economy
was reported to have grown 6.5% in the fourth quarter, on a year
earlier, topping forecasts of 6.1%.
Industrial production for December also beat estimates,
though retail sales missed the mark. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS trimmed losses and were off 0.2%, having hit a
string of record peaks in recent weeks. Japan's Nikkei .N225
slipped 0.8% and away from a 30-year high.
E-Mini futures for the S&P 500 ESc1 dipped 0.3%, though
Wall Street will be closed on Monday for a holiday. EUROSTOXX 50
futures STXEc1 eased 0.2% and FTSE futures FFIc1 0.1%.
The pick-up in China was a marked contrast to the U.S. and
Europe, where the spread of coronavirus has scarred consumer
spending, underlined by dismal U.S. retail sales reported on
Also evident are doubts about how much of U.S.
President-elect Joe Biden's stimulus package will make it
through Congress given Republican opposition, and the risk of
more mob violence at his inauguration on Wednesday.
"The data bring into question the durability of the recent
move higher in bond yields and the rise in inflation
compensation," said analysts at ANZ in a note.
"There's a lot of good news around vaccines and stimulus
priced into equities, but optimism is being challenged by the
reality of the tough few months ahead," they warned. "The risk
across Europe is that lockdowns will be extended, and U.S. cases
could lift sharply as the UK COVID variant spreads."
That will put the focus on earnings guidance from corporate
results this week, which include BofA, Morgan Stanley, Goldman
Sachs and Netflix.
The poor U.S. data helped Treasuries pare some of their
recent steep losses and 10-year yields US10YT=RR were trading
at 1.087%, down from last week's top of 1.187%.
The more sober mood in turn boosted the safe-haven U.S.
dollar, catching a bearish market deeply short. Speculators
increased their net short dollar position to the largest since
May 2011 in the week ended Jan. 12. The dollar index duly firmed to 90.786 =USD , and away from
its recent 2-1/2 year trough at 89.206.
The euro had retreated to $1.2074 EUR= , from its January
peak at $1.2349, while the dollar held steady on the yen at
103.80 JPY= and well above the recent low at 102.57.
The Canadian dollar eased to $1.2773 per dollar CAD= after
Reuters reported Biden planned to revoke the permit for the
Keystone XL oil pipeline. Biden's pick for Treasury Secretary, Janet Yellen, is
expected to rule out seeking a weaker dollar when testifying on
Capital Hill on Tuesday, the Wall Street Journal reported.
Gold prices were undermined by the bounce in the dollar
leaving the metal down at $1,824 an ounce XAU= , compared to
its January top of $1,959.
Oil prices ran into profit-taking on worries the spread of
increasingly tight lockdowns globally would hurt demand. O/R
Brent crude LCOc1 futures were off 52 cents at $54.58 a
barrel, while U.S. crude CLc1 eased 46 cents to $51.90.
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
(Editing by Shri Navaratnam and Gerry Doyle)
Written By: Reuters
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