Asia
Will US stock markets closing lower on Friday, Asia-Pacific indices struggled on Monday morning to make any positive advance. With US bond yields moving higher, global equities were out of favour as investors shunned riskier assets. As the dollar headed higher, domestic currencies slipped back. A declining yen, which usually spurs Japan’s Nikkei and Topix to nudge higher, failed to have that effect today, with both markets dropping back on Friday’s close. Losses were modest, however, particularly on the market cap-weighted Topix.
The Bank of Japan makes its monetary policy decision on Friday – although as usual is expected to hold interest rates. Long-suffering BoJ-watchers are hoping that the Bank may offer some guidance about monetary easing in the coming months and years.
Europe
Eurozone exchanges caught the global mood of uncertainty on Monday morning, but as in Asia, daily losses were all less than 1%. This week sees the European Central Bank meet, but analysts expect any changes to monetary policy to be deferred until the early summer.
In the UK, Capita (CPI) was the biggest riser on the FTSE 250 despite unveiling an annual loss of over £500 million. The outsourcer lost 40% of its value one day in January after a profit warning but today the shares rebounded over 10% on news of a deeply discounted rights issue. A billion shares will be offered at 70p, against the company’s closing share price of under 160p on Friday. Fund manager Neil Woodford said on Monday that he fully supports the company’s plans.
North America
This quarterly earnings season has so far failed to fuel any strong move to the upside for US markets. This week is the turn on the tech stars: Google parent company Alphabet (GOOGL) reports after the market closes today, and Facebook (FB) and Amazon (AMZN) report on Wednesday.
With 10-year Treasury yields moving to levels last seen in early January, stock market futures inevitably tracked lower. The Dow Jones, S&P 500 and Nasdaq are all expected to start the week down.
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