Asian stocks mixed, dollar nears three-month low: markets wrap

Stocks gained in Japan, and those in Hong Kong moved slightly higher, with Baidu Inc. a top performer following better-than-expected third-quarter results. Asian artificial intelligence stocks slipped after Nvidia Corp.’s earnings got a tepid reaction from investors. Trading is becoming more muted in the leadup to the Japan and US Thanksgiving holidays on Thursday. 

Mainland Chinese shares also fell, with tech and industrial companies among the laggards. Chinese stocks will remain around current levels for some time, according to Hao Hong, chief economist at Grow Investment Group. 

“There are so many unresolved issues that are overhanging the Chinese market,” Hong said on Bloomberg Television. “The property bubble probably takes some years to resolve. So as a result, you will see lots of headline risk, but then at the same time you see lots of policy support.”

US equity futures steadied after the Nasdaq 100 Index sank 0.6% on Tuesday. Treasuries were little-changed in Asian hours after climbing Tuesday, led by the shorter end. The greenback traded in narrow ranges against its G10 peers. 

“With volatility low and the market pricing a ‘soft landing’ in the US, the US dollar can stay heavy this week,” Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia, wrote in a note.

The offshore yuan extended its winning streak into a fifth day after China’s central bank set the currency fixing at the strongest level since June. The yuan had jumped beyond the daily reference rate for the first time since July in the previous session.

Cryptocurrencies were down as Binance Holdings Ltd. and its CEO Changpeng “CZ” Zhao pleaded guilty to anti-money-laundering and US sanctions violations under a sweeping settlement with the US. The deal allows Binance to continue operating, though Zhao stepped down as CEO and will be replaced by Richard Teng. Bitcoin fell as much as 3.2% to $35,663, and Ether declined as much as 2.8% to $1,930.75.

Proceeding carefully

The Fed’s minutes released on Tuesday show legislators united around a strategy to “proceed carefully” on future interest-rate moves and base any further tightening on progress toward their inflation goal. Swap contracts linked to Fed meetings currently price in around 25% probability of a first Fed rate cut in March.

“We should not attach too much value anymore to the remaining hike that is implied in the September dot plot,” Philip Marey, senior US strategist at Rabobank, wrote in a note. “If we were to see stronger economic and inflation data before the December meeting, longer-term rates are likely to rebound and substitute for a rate hike. Therefore we do not expect further hikes.”

Meanwhile, among areas of focus in Asia is China’s latest probe into company executives after the arrest of game-streaming company DouYu International Holdings Ltd.’s founder Chen Shaojie on unspecified charges. A series of unexplained executive detentions have created jitters across the country’s private sector.

Geopolitics is still in focus too. Israel’s deal with Hamas will free about 50 hostages in return for a four-day pause in fighting in the Gaza Strip, and some Palestinians will be released from Israeli prisons.

Elsewhere, oil steadied, with signs of another stockpile build in the US coming ahead of an OPEC+ meeting on supply over the weekend.