[1/2] The US Capitol is seen the night before President Joe Biden addresses a joint session of Congress during his State of the Union Address in Washington, USA, February 6, 2023….
May 10 (Reuters) – Jamie McGeever’s Outlook on Asian Markets.
Asian markets on Wednesday take a local rudder with heavy earnings from Japanese companies and scattered economic data from South Korea on the back of heightened fears over the US debt ceiling crisis.
Japan’s annual results on Wednesday included SoftBank (9434.T), Toyota (7203.T) and Panasonic (6752.T).They follow bumper numbers from some of the country’s biggest on Tuesday trading companysome of which were recently drawn to billionaire investor Warren Buffett.
Japan’s Nikkei 225 index has been performing well lately, hitting a 16-month high last week. It was up 1% on Tuesday and has been down only 4 of the last 20 trading sessions.
South Korea’s April unemployment rate and March current account data are the main economic data to be released on Wednesday, while Japan’s foreign reserves for April are also due.
But as the stalemate between Republicans and Democrats in Washington deepens the $31.4 trillion debt ceiling crisis, global markets are on edge when the U.S. government runs out of cash, edging closer to X-Date. .
Treasury Secretary Janet Yellen has repeatedly warned that the X-Date could be June 1st.
Investors are starting to realize the potential. His one-month US Treasury yield was 5.50%, the highest in decades, reflecting a premium of about 25 basis points over three-month Treasuries and the upper end of the Federal Fund’s target range.
Prominent bond investor Bill Gross said that at current levels, the one-month bond is a screaming sellout because history shows the deal will happen, even if it’s at the last minute. I said “buy”. But what if this time is different?
The wider market is feeling the heat. Wall Street and global stocks closed lower on Tuesday, with Asian stocks ex-Japan suffering their biggest losses in two weeks and gold and the Japanese yen higher.
Three major developments that could provide more direction for Wednesday’s markets are:
– South Korea Unemployment Rate (April)
– Korea Current Account (March)
・Foreign exchange reserves in Japan (April)
By Jamie McGever.
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Opinions expressed are those of the author. They do not reflect Reuters News’ commitment to integrity, independence and freedom from bias under its Trust Principles.