Asia Stocks Set for Gains After Commodities Rally: Markets Wrap

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Stocks in Asia looked set to advance Monday after last week’s strongest rally in oil this year led a surge in commodity prices that bolstered optimism the global economy can gather momentum.

Equity futures gained in the most recent trading for markets in Japan, Australia, China, Hong Kong and South Korea. The contracts shrugged off a bout of volatility that sent the Nasdaq 100 Index lower and S&P 500 Index lower, and they also looked through a North Korean missile test. Oil gained last week as inventories for crude and gasoline shrank, while copper surged to a two-year high, with Citigroup Inc. saying the rally probably has further to go and top producer Chile raising its price forecasts.

Investors will be focusing on China’s official manufacturing and non-manufacturing purchasing managers’ indexes for July, due out at 10 a.m. Tokyo time, as they headline a jam-packed economic calendar for the Asia-Pacific region. U.S. corporate earnings also remain of interest, after Baidu Inc. smashed earnings estimates with its core search advertising business bouncing back from Chinese regulations that squeezed earnings last year.

Security checks at all major Australian airports were ramped up following a counter-terrorism operation that foiled an alleged plot to bring down a plane. Four men were arrested in counter-terrorism raids on homes in Sydney on Saturday after authorities discovered plans for an attack to “bring down” an aircraft, Prime Minister Malcolm Turnbull said in a televised press conference on Sunday.

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Here are some key events coming as the week gets going:

  • The Reserve Bank of Australia and the Reserve Bank of India both hold meetings this week.
  • China’s PMI manufacturing gauge probably moderated to 51.5 from 51.7, according to economists: that level still points to expansion. 
  • Japan reports industrial output for June, forecast to advance 1.5 percent month-on-month
  • Australian private-sector credit growth is projected to have risen 0.4 percent in July; Also due out: June housing starts for Japan, building permits for New Zealand, and new home sales for Australia.

Here are some of the key moves in markets:

  • Futures on the S&P 500 Index fell 0.1 percent as of 7:04 a.m. in Tokyo. 
  • Futures on Japan’s Nikkei 225 Stock Average were up 0.1 percent.
  • Contracts on the S&P/ASX 200 Index rose 0.4 percent in the most recent trading, while those on the Kospi index and the FTSE China A50 Index each advanced 0.3 percent. Futures on Hong Kong’s Hang Seng Index were 0.1 percent higher.
  • The yen was little changed at 110.66 per dollar, near Friday’s 1 1/2-month high, and the euro bought $1.1752. 
  • The Bloomberg Dollar Spot Index declined 0.4 percent last week for a third week of retreats.
  • West Texas Intermediate rose 0.4 percent to $49.93 a barrel, advancing for a sixth day. 

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