ASIAN MARKET REPORT

Market Summary

      Stock Market

·      Asian stocks climbed, bringing the regional benchmark index to its longest winning-streak since February, on optimism Greece will dodge default and after U.S. manufacturing surprisingly extended at a faster stride in June, reducing risk for bank earnings and exports.

·      Japanese and South Korean shares climbed on Friday to kick off a new quarter on a positive note after U.S. stocks continued their rally and Greece’s austerity program cleared the final hindrance in parliament the day before. Australian stocks dropped to give back some of the extensive gains they obtained on Thursday, as weaker-than-expected data on Chinese manufacturing in June triggered profit-taking.

·        Australia’s S&P/ASX 200 Index dropped 0.36 percent. Hong Kong’s Hang Seng Index climbed 1.41 percent, while China’s Shanghai Composite Index closed down 0.1 percent. South Korea’s Kospi Index was up 1.19 percent. Japan’s Nikkei 225 Stock Average added 0.53 percent.

Forex Market

·     Asian currencies carried on toward their biggest weekly advance this year, led by South Korea’s won and the Malaysian ringgit, as regional central banks raised interest rates and concern cooled down that Greece will default.

·     South Korea’s won gained for a second week and hit its highest level in almost three years after a government report today revealed inflation grew in the last month. 

·     The dollar increased against the euro and yen before a report that may show U.S. consumer confidence enhanced, indicating the world’s largest economy is recovering.

·     The euro may rise to almost a two- month high against the yen next week after rising above key technical levels, Ueda Harlow Ltd. said, citing trading patterns.

      Commodity Market

·  Commodity futures trading in China, the largest buyer of copper and soybeans, tumbled 30 percent in the first half as regulators stifled on speculation and as the central bank carried out liquidity to ease rising inflation. 

·  Gold may decline for a second day after the Standard & Poor’s 500 Index had the biggest four-day gain since September and the risk that Greece will default eased, reducing demand for the metal as an alternative investment.

·  Oil declined, cutting the biggest weekly gain in almost three months, as signs of slowing manufacturing growth in China and the U.S., the world’s biggest energy users, triggered speculation fuel demand may reduce.

·  Copper in London slid for the first time in four days as manufacturing in China, the world’s largest user, dipped to the lowest level since February 2009. 

·  Corn expanded its biggest monthly loss since October 2008 and wheat stumbled to the lowest level in almost a year after the U.S. reported acreage and inventories that topped analyst’s estimates. 

Bond and Yields

·         Treasuries headed for their steepest weekly loss in five months after Greece staved off defaulting on its debt, bolstering expectations that economic growth will pick up in the second half of the year.

·         Investors wise enough to bet on Greek bonds as the nation’s two-year yields climbed to a record 30 percent have been rewarded with the best returns of any sovereign-debt market during the past two weeks.

·         German 10-year government bonds snapped four days of declines before data forecast to confirm growth in euro-region manufacturing slowed in June. 

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