In Asian Equity Markets Japanese stocks hit fresh two-year highs on Tuesday morning, tracking a Wall Street rally as data pointed to underlying strength in the U.S. economy, while a weaker yen also helped overall sentiment. The Nikkei rose 0.9 percent to 20,582.26 in midmorning trade, the highest level since August 2015. The broader Topix gained 0.5 percent to 1,683.84, also the highest since August 2015. MSCI’s broadest index of Asia-Pacific stocks outside Japan was 0.3 percent higher, clawing back losses from earlier in the Asian day. Australian stocks fell 0.5 percent, pressured by consumer and energy shares.
In Currency Markets the dollar struck a 1-1/2-month high on Tuesday as Treasury yields rose after a strong reading for U.S. manufacturing activity hardened expectations for U.S. interest rates to rise by the year-end. The euro was down 0.2 percent at $1.1708 after brushing $1.1702, its weakest since Aug. 17. The dollar, which initially fell to 112.660 yen early in the session, was up 0.35 percent at 113.150 yen. The Australian dollar fell to its lowest in more than two months after the Reserve Bank of Australia left interest rates unchanged and gave a somewhat cautious assessment of the local economy. The Aussie fell 0.4 percent to $0.7792. The dollar index against a basket of six major currencies was up 0.3 percent at 93.848.
In Commodities Markets oil prices fell on Tuesday, declining for a second day and sapping more strength from a third-quarter rally, amid signs that a global glut in crude may not be clearing as quickly as some had hoped. U.S. crude was down 0.3 percent, at $50.44 a barrel, after closing the previous session down 2.1 percent. Brent crude was down 0.3 percent, at $55.93 a barrel. The contract fell 1.2 percent, in the last session. Spot gold was down 0.1 percent at $1,269.20 an ounce. Silver had edged down 0.2 percent to $16.51 an ounce after earlier matching its lowest since Aug.9, which it originally hit yesterday. Platinum and palladium were both 0.3 percent lower at $908.25 and $906.75 an ounce respectively.
In US Equity Markets stocks started the fourth quarter on a strong note on Monday, with all three major indexes hitting record high closes as data pointed to underlying strength in the economy. The Dow Jones Industrial Average rose 0.68 percent, to 22,557.6, the S&P 500 gained 0.39 percent, to 2,529.12 and the Nasdaq Composite added 0.32 percent, to 6,516.72. Among the sectors with the biggest gains on Monday were materials, industrials and financials. General Motors was up 4.4 percent and hit an intraday record high after brokerage Deutsche Bank said the carmaker could launch driverless cars on a large scale in 2020. A measure of U.S. manufacturing activity rose to a near 13-1/2-year high in September.
In Bond Markets Japanese government bond yields tracked a rise in their U.S. peers and rose on Tuesday, with a 10-year bond auction drawing lukewarm demand as a rise in equities curbed investor interest towards safe-haven debt. The benchmark 10-year JGB yield rose 1 basis point to 0.080 percent, highest since July 26. The 20-year yield edged up half a basis point to 0.595 percent. The yield on the U.S. benchmark 10-year note hit its highest since mid-July on Monday after the upbeat data reinforced expectations that the Federal Reserve will increase U.S. interest rates in December for a third time this year.
Economic Calendar
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