By Scott Murdoch
SYDNEY (Reuters) – Asia’s share markets were in a cautious mode on Tuesday as global investors waited to see whether China recorded a first quarter bounceback from its punishing pandemic lockdowns that led to a major economic slowdown.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4%, after U.S. stocks ended the previous session with mild gains. The index is up 1.1% so far this month.
A Reuters poll last week found China’s GDP growth was forecast to speed up to 4.0% in the first quarter from a year earlier, versus 2.9% in the previous three months, according to the median forecast of 70 economists.
For 2023, growth was expected to pick up to 5.4%, the poll showed, from 3.0% last year which was one of its worst performances in nearly half a century due to the pandemic.
China’s government has set a 5% target for economic growth for this year after missing the 2022 goal.
In Asian trade, the yield on benchmark 10-year Treasury notes rose to 3.5985% compared with its U.S. close of 3.591% on Monday.
The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 4.1836% compared with a U.S. close of 4.188%.
Australian shares were down 0.37%, while Japan’s Nikkei stock index rose 0.5%.
Australia’s central bank considered hiking rates for an 11th time in April before deciding to pause, but was ready to tighten further if inflation and demand failed to cool, minutes of the Reserve Bank of Australia’s April 4 policy meeting showed.
The Dow Jones Industrial Average rose 0.3% to 33,987.18, the S&P 500 gained 0.33% at 4,151.32 and the Nasdaq Composite gained 0.28% at 12,157.72.
“The possibility of further tightening of Federal Reserve policy resulted in Treasury yields lifting while U.S. equity markets were relatively subdued,” ANZ economists wrote on Tuesday.
Two key business surveys for the U.S. published on Monday, including the Empire State Survey, showed business conditions and sentiment remained robust despite the banking sector crisis and tightening monetary policy conditions.
European stocks ended just barely lower to snap a five-session streak of gains, with the pan-European STOXX 600 index down 0.01%.
The winning streak was the longest for the index in three months.
The dollar was flat against the yen at 134.45, still some distance from its high this year of 137.91 hit in March.
The European single currency was flat on the day at $1.0922, having gained 0.77% in a month, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was down at 102.09.
U.S. crude ticked up 0.2% to $80.99 a barrel. Brent crude fell to $84.93 per barrel. [O/R]
Gold was slightly high with the spot price at $1996.36 per ounce. [GOL/]
(Reporting by Scott Murdoch in Sydney; Editing by Himani Sarkar)
