Asian Stocks to Edge Higher After Gains in Europe: Markets Wrap

By Pune Media On Feb 17, 2025 28

(Bloomberg) — Stocks in Asia are broadly set to track gains in Europe, where the likelihood of greater military spending lifted shares in defense companies and bond yields.

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Futures pointed to early advances in Hong Kong and Sydney, and a flat open in Tokyo. Europe’s Stoxx 600 index rose 0.5% and 10-year bund yields — the benchmark borrowing rate for the euro area — reached the highest in more than two weeks. US markets were closed for a holiday on Monday.

The Australian dollar strengthened to a two-month high before a central bank meeting that’s expected to see the first rate cut in four years. Meanwhile, BHP Group Ltd.’s first-half profit slumped 23% in results released early Tuesday, as the world’s biggest public miner said it was impacted by falling Chinese demand for key commodities including iron ore and copper.

The US asked European nations to spell out what security guarantees and equipment they can offer Ukraine to ensure a lasting peace settlement. European officials say they are working on a major package to ramp up defense spending and some EU leaders are meeting in Paris to draw up their response.

“The goalposts are shifting, and the EU is realizing they can rely less and less on the US for protecting their borders. In lockstep, we’re going to have to see European countries spend more on defense,” said Aneeka Gupta, head of macro research at Wisdomtree UK Ltd. “That does warrant a bit more caution on bonds.”

The developments have cemented the view that debt sales will need to increase as European nations shoulder the cost of a lasting peace deal between Ukraine and Russia. Upgrading defense and protecting Ukraine may cost Europe’s major powers an additional $3.1 trillion over 10 years, according to Bloomberg Economics estimates.

Meanwhile, the Reserve Bank of Australia is widely expected to embark on easing on Tuesday, with its first rate cut since November 2020. However, a strong labor market, resilient consumer spending, robust credit growth and a weaker currency could make the case for a hold, said Bloomberg Economics economist James McIntyre.

Also in Asia, optimism around a revival in China’s economy was boosted Monday after a meeting between President Xi Jinping and business figures including Alibaba Group Holding Ltd. co-founder Jack Ma raised hopes that a years-long crackdown on the private sector is ending.

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Some of the key events this week:

Australia rate decision, Tuesday
UK jobless claims, unemployment, Tuesday
Bank of England Governor Andrew Bailey speaks, Tuesday
Canada CPI, Tuesday
New Zealand rate decision, Wednesday
Indonesia rate decision, Wednesday
UK CPI, Wednesday
South Africa CPI, retail sales, Wednesday
US FOMC minutes, housing starts, Wednesday
Australia unemployment, Thursday
China loan prime rates, Thursday
Eurozone consumer confidence, Thursday
G-20 foreign ministers meet in South Africa, Thursday – Friday
Reserve Bank of Australia Governor Michele Bullock and officials testify to parliamentary committee, Friday
Japan CPI, Friday
Eurozone HCOB manufacturing & services PMI, Friday
UK S&P Global manufacturing & services PMI, Friday
US S&P Global manufacturing & services PMI, Friday
Bank of Canada Governor Tiff Macklem speaks, Friday

Some of the main moves in markets:

Stocks

Hang Seng futures rose 0.3% as of 7:24 a.m. Tokyo time
S&P/ASX 200 futures rose 0.2%
Nikkei 225 futures were little changed

Currencies

Cryptocurrencies

Bitcoin fell 0.2% to $96,186.26
Ether fell 0.6% to $2,759.62

Bonds

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Sujata Rao.