Singapore - Asian stocks mostly rose on
Monday, spurred by record high closes for the Dow and S&P 500 on
bets that the Federal Reserve's policy will remain accommodative
following lacklustre US data, which sent the dollar reeling to
a 10-month low.
Chinese stocks fell over 2 percent in early trade but
recouped some of the losses after data showed the economy grew
at a slightly faster than expected pace of 6.9 percent in the
second quarter thanks to robust industrial output and retail
sales.
The CSI 300 was 0.7 percent lower, and the
Shanghai Composite <.SSEC. was down 1.1 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
advanced 0.2 percent on Monday. Japanese markets
were closed for a holiday.
Australian shares were 0.3 percent lower, while
South Korea's KOSPI jumped 0.3 percent.
Wall Street closed higher on Friday, after data showed
consumer prices were unchanged in June and retail sales fell for
a second straight month, pointing to tame inflation and subdued
expectations of strong economic growth in the second quarter.
The chances of a rate hike in December fell to 43.1 percent
after the data came out from 55 percent late Thursday, according
to the CME Group's Fedwatch tool.
The dollar index, which tracks the greenback against
a basket of trade-weighted peers, hit a 10-month low early on
Monday. It was trading flat at 95.156 after losing 0.6 percent
on Friday.
"Friday’s US data led to more USD selling," Stephen
Innes, senior trader at OANDA, wrote in a note.
"With less than a 50 percent December rate hike probability
priced in, and with no supportive Fed speak on the calendar
before July 26th, the dollar could struggle."
US 10-year Treasury yields, however, which
fell to as low as 2.279, recovered to end at 2.3319 percent on
Friday.
The dollar was also steady at 112.55 yen early on
Monday, after closing down 0.6 percent on Friday.
The Bank of Japan is expected to keep its monetary policy
settings unchanged when it meets on Wednesday and Thursday.
The weakness in the dollar saw other currencies soar, with
the Australian dollar hitting its highest level in over
two years and the Canadian dollar touching a one-year
high early on Monday.
The Aussie was trading 0.2 percent lower than its Friday
close at $0.7813, following a 1.3 percent surge, and the loonie
was 0.1 percent weaker at C$1.2654 to the dollar, retaining
Friday's 0.6 percent jump.
The euro slipped slightly to $1.14615, but
remained close to its highest in a year hit last week, after
gaining 0.6 percent on Friday.
In commodities, oil inched higher, extending last week's
gains on signs of lower U.S. inventories and higher Chinese
demand.
US crude rose 0.25 percent to $46.67 a barrel.
Global benchmark Brent added 0.3 percent to $49.07.
The dollar's loss was gold's gain, with the precious metal
rising on Friday. Spot gold was 0.2 percent higher at
$1,231.01 an ounce.