Aurelia Butler

(Reuters) – A look at the day ahead in Asian markets.Asian FX traders will be on heightened Japanese intervention alert again on Tuesday after Tokyo reportedly stepped into the market on Monday, catapulting the yen up from a 34-year low of 160 per dollar and onto a roller-coaster ride of volatility.It was the dollar’s breach of 160 yen that appears to have snapped the Ministry of Finance’s patience. The yen’s rebound was perhaps exaggerated because Japan was closed for a public holiday on Monday – the dollar fell as low as 154.50 yen – so market liquidity will return to more normal levels on Tuesday.Chinese stocks have opened the week strongly, hitting a six-month high as property sector sentiment improves, and Tesla (NASDAQ:TSLA) shares’ 15% surge on Monday following Elon Musk’s visit to Beijing can only be supportive of Chinese markets and tech more broadly.A pullback in U.S. bond yields – 5.00% on the two-year yield once again proving to be a firm ceiling – will also help cement the upbeat backdrop to the market open in Asia on Tuesday.The regional economic data and events calendar is overflowing with potential market-moving releases, included among them: Chinese PMIs, Japanese retail sales, unemployment and industrial production, Bank of Korea meeting minutes and Australian retail sales. The currencies of all these countries will be sensitive to these releases, particularly in light of the yen’s roller-coaster ride and Japan’s reported yen-buying intervention on Monday.The yen ended up strengthening 1.5% against the dollar on Monday, its biggest one-day rise this year, but that barely clawed back the ground lost in its 1.6% slump on Friday, the day of the Bank of Japan’s policy announcement.Indeed, at around 156.00 per dollar, the yen goes into Asian trading on Tuesday slightly weaker than it was before the BOJ’s decision. If Tokyo did intervene, it has clearly managed to relieve the selling pressure on the yen, but how long that lasts remains to be seen.The last time Japan intervened in the FX market was October 2022, when it spent around $40 billion to buy yen when the currency was around 152.00 per dollar. It took more than a year for the yen to get back to that level, and a further five months to break it. The current economic climate and market conditions are different of course, and perhaps Japan’s resolve is stronger now than it was then. Comments from Japan’s top currency diplomat, Masato Kanda, were pretty pointed: “The developments we’re seeing now … can be described as speculative, rapid and abnormal volatility. The damage such moves inflicts on the economy is hard to overlook.”One suspects yen bears will be looking over their shoulders quite a bit in the coming days.Here are key developments that could provide more direction to markets on Tuesday:- China manufacturing and services PMIs (April)- Japan retail sales, unemployment, industrial output (March)- Bank of Korea meeting minutes (Reporting and Writing by Jamie McGeever) More

“Our base case remains a soft landing, with economic growth and inflation cooling off as consumers take a breather after a long period of strong spending, and the Fed starting to cut rates before the end of the year,” UBS said in a Monday note as it shifted its call on first rate cut to September from June. Concerns about stagflation rather than a soft landing were thrust into the spotlight recently following data showing economic growth slowed in Q1 — to an annualized pace of 1.6% in Q1, well below expectations of 2.5% — at a time when inflation continues to surprise to the upside.  But softer economic growth appears to be cure for sticky inflation, UBS suggests, underscoring recent business surveys indicating that consumers are “pushing back harder against further price increases.”The strong job gains in recent months haven’t knocked the trend of slowing wage growth off course, UBS says, pointing to demand and supply in the labor market that is coming into balance that will likely pave the way for the Fed to cut rates and halt the risk of a hike. “We believe that a cooling labor market will make it easier for the Fed to cut rates even while inflation remains above target, and we view additional rate hikes as unlikely even if inflation remains sticky in the near term,” UBS added.The expected delay to rate cuts have gathered steam in recent weeks, with December now seen as the start of the rate cutting cycle, according to Investing.com’s Fed Rate Monitor Tool.But with the Fed two-day meeting just a day away, many on Wall Street will now be focused on whether Fed chairman Jerome Powell endorses the market’s view of less dovish path for interest rates. More

The global underwriting leader reported adjusted earnings per share (EPS) of $16.32, exceeding analyst estimates by $0.39. Revenue for the quarter reached $4.13 billion, also topping the consensus forecast of $4.05 billion.The stock was trading flat during after hours.The company’s underwriting success was highlighted by a combined ratio of 88.8%, indicating strong profitability, and a year-over-year (YoY) gross written premium growth of 17.9%. This performance reflects a 50% increase in underwriting income over the previous year, setting a new quarterly record of $409 million. The improvement was attributed to margin enhancements in underwriting and a significant rise in net investment income, which hit a record $457 million, thanks to a larger asset base and robust core fixed income returns.Everest Re’s President and CEO, Juan C. Andrade, commented on the results, “Everest had a strong start to 2024, with first quarter results delivering significant profitability across all key metrics, including a Total Shareholder Return in excess of 18% and an operating return on equity of 20%.” He attributed the success to disciplined underwriting and strategic growth across global markets.The company’s net income for the quarter was $733 million, a substantial increase from $365 million in the first quarter of the previous year. Operating income also saw a significant rise to $709 million from $443 million YoY. The robust financial health of Everest Re is further evidenced by a solid operating cash flow of $1.1 billion, consistent with the prior year’s quarter.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More