Asian Stocks Head for New Highs, Bonds Hold Losses: Markets Wrap (Bloomberg)

Asian stocks extended this year’s stellar run, on course to close at new all-time highs, following their U.S. counterparts higher amid optimism for global growth. Treasuries held losses on speculation Congress will avert a government shutdown.

Equity benchmark indexes in Japan, Australia and South Korea all climbed, with technology shares leading gains on the MSCI Asia Pacific Index. The S&P 500 Index posted its biggest gain in over a month, amid hopes that tax cuts will boost profits. A global rise in yields has pushed those on 10-year Japanese government bonds to their highest since July, stretching toward a test of the Bank of Japan’s target around zero percent.

Market focus will now turn to a deluge of Chinese data scheduled for Thursday, including GDP, industrial production and retail sales. The latest sign of confidence in global growth came from Apple Inc., which climbed after saying it will bring hundreds of billions of dollars back to the U.S. from overseas to invest in jobs and facilities.

Bitcoin bounced back above $10,000, having dropped below the threshold for the first time since Dec. 1. Oil edged higher as OPEC showed increased determination to curb production. The loonie fluctuated as the Bank of Canada raised its benchmark rate to 1.25 percent and signaled more hikes are on the way.

Financial stocks rose Wednesday after Bank of America Corp. beat estimates and indicated that it could benefit from the U.S. tax changes by reducing pressure to cut future costs. A firming outlook for global growth and bullish profit expectations will keep the bull run in stocks going until 2019 or beyond, according to a Bank of America survey of fund managers. At the same time, Pacific Investment Management Co.’s Joachim Fels warned that “the fact that the fear is gone is the main reason why we should be worried” about the market climb.

Here’s what to watch out for this week:

U.S. housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release.

Central banks in South Korea, Indonesia, Turkey and South Africa are all expected to stay on hold over the next day.
China releases fourth quarter GDP, December industrial production and retail sales Thursday.
And these are the main moves in markets:

Stocks
Japan’s Topix index rose 0.5 percent as of 9:23 a.m. in Tokyo.
Australia’s S&P/ASX 200 Index added 0.1 percent and South Korea’s Kospi index climbed 0.6 percent.
Futures on Hong Kong’s Hang Seng Index gained 0.5 percent.
Futures on the S&P 500 gained 0.1 percent after the underlying gauge advanced 0.9 percent on Wednesday.
The MSCI All-Country World Index added 0.5 percent Wednesday, closing at a fresh all-time high.

Currencies
The Bloomberg Dollar Spot Index rose 0.2 percent.
The euro rose 0.1 percent to $1.2198.
The British pound was flat at $1.3830, around the highest since June 2016.
The yen was flat at 111.27 per dollar after dropping 0.8 percent in its first retreat in more than a week.

Bonds
The yield on 10-year Treasuries held gains after rising five basis points to 2.59 percent Wednesday.
Australia’s 10-year yield was up four basis points to 2.83 percent.
Japanese 10-year yields were at 0.084 percent.

Commodities
West Texas Intermediate crude rose 0.4 percent to $64.20 a barrel.
Gold advanced 0.2 percent to $1,329.33 an ounce.