Most Asian Stocks Gain on U.S. Debt-Ceiling Deal: Markets Wrap

Equities rose in Seoul and Tokyo, with South Korea’s Kospi index having the biggest advance in the region. U.S. markets gyrated late Wednesday amid several events that happened in rapid succession, including the resignation of Federal Reserve Vice Chairman Stanley Fischer and a surprise Canadian interest-rate increase. The dollar retreated against major peers as North Korean jitters overshadowed the deal to extend the U.S. debt limit for three months. Traders are also watching Category 5 hurricane Irma, which is headed for Florida.

While the U.S. agreement pushes to the side the North Korea confrontation that has dominated markets most of this week, traders will remain watchful for developments amid concerns Pyongyang may fire a ballistic missile before its “founding day” on Sept. 9. U.S. President Donald Trump said that military action against the North wasn’t his first choice, though South Korea moved to bolster its missile shield on Thursday. Meanwhile, the Fischer departure, effective next month, adds to uncertainty about Fed leadership, given that Janet Yellen’s term as chair expires early next year.

Attention now turns to the European Central Bank meeting on Thursday, with investors looking for clarity from President Mario Draghi on the outlook for the the ECB’s bond-buying program. The Governing Council has been presented with documents outlining multiple scenarios for adjusting quantitative easing, according to euro-area officials familiar with the matter.

The key events this week:

U.S. service industries rebounded in August, with the ISM non-manufacturing index rising to 55.3. July’s trade gap widened less than forecast to $43.7 billion amid rising energy and aircraft exports. The Fed’s Beige Book showed limited wage pressures despite a tightening labor market, while describing growth as "modest to moderate." China trade figures are anticipated to show another month of solid export growth, while FX reserves probably continued to rise on stricter capital controls, robust growth and a stronger yuan, according to Bloomberg Intelligence. Malaysia’s central bank will probably hold its benchmark rate at 3 percent at meeting Thursday. Australian retail sales were unchanged in July from June, while the nation’s trade surplus in July came in less than economists expected.

And here are the main moves in markets: Stocks

The Topix index rose 0.3 percent as of 2:33 p.m. Tokyo time, while the Kospi index in South Korea was up 1.2 percent and Australia’s S&P/ASX 200 Index fluctuated. Hong Kong’s Hang Seng Index gained was little changed as Chinese indexes fluctuated. S&P 500 Index futures slipped 0.1 percent after the underlying gauge rose 0.3 percent. The MSCI Asia Pacific Index climbed 0.4 percent.

Currencies

The Japanese yen rose 0.2 percent to 109.05 per dollar after falling 0.4 percent Wednesday, when it had earlier traded near its highs for the year. The Australian dollar was back below 80 U.S. cents after the retail sales and trade data. The Bloomberg Dollar Spot Index fell for a sixth day, the longest streak of losses since May. It was down less than 0.1 percent; it hasn’t risen since last Wednesday. The euro added 0.1 percent to $1.1926. The Canadian dollar surged 1.2 percent Wednesday to its the strongest in more than two years against the dollar after the Bank of Canada raised the benchmark rate to 1 percent. It was at C$1.2235.

Bonds

The yield on 10-year Treasuries fell about one basis point to 2.09 percent after jumping about four basis points Wednesday. Australia’s 10-year yield rose four basis points to 2.64 percent.

Commodities

Gold was up 0.1 percent $1,335.61 an ounce after falling 0.4 percent Wednesday. West Texas Intermediate crude was down 0.2 percent to $49.06 a barrel after jumping 1 percent. The Bloomberg Commodity Index fell 0.1 percent after gaining 0.4 percent Wednesday to the highest since April.