* Asian stock markets: tmsnrt.rs/2zpUAr4
* Nikkei discount of 1%, reduced by US holidays
* Attention to China’s GDP data for economic prospects
* US dollar, treasury holds profits as risk appetite weakens
SYDNEY, Jan. 18 (Reuters) – Asian stock markets retreated from highs on Monday as disappointing news about U.S. consumer spending weakened risk sentiment ahead of a thorough reading on the health of the Chinese economy.
Doubts were also clear about how much of US President-elect Joe Biden’s stimulus package would take Republican opposition through Congress and the risk of more mob violence during his inauguration Wednesday.
MSCI’s broadest index of Asia-Pacific stocks outside Japan lost 0.3% after hitting a record high in recent weeks. The Japanese Nikkei has slipped by 1% and away from a 30-year high.
E-Mini futures for the S&P 500 fell 0.3%, although Wall Street will be closed for a holiday on Monday.
Chinese GDP data is expected to show that growth has risen to an annual 6.1% over the past quarter, from 4.9% in the third quarter. Monthly figures on retail sales and industrial production should be strong at the end of the year.
“We expect Chinese GDP growth to accelerate to 6.5% per annum in the fourth quarter due to strong industrial production, recovery in services and strong exports,” said Joseph Capurso, head of international economics at CBA. .
“The data will confirm that the Chinese economy ended the year strong.”
This would be a clear contrast to the US and Europe, where the spread of coronavirus has slowed consumer spending, underlined by the gloomy US retail sales reported on Friday.
“The data calls into question the sustainability of the recent increase in bond yields and the rise in inflation compensation,” ANZ analysts said in a statement.
“There is a lot of good news around vaccines and stimuli being priced in equities, but optimism is being challenged by the reality of the difficult few months ahead,” they warned. “The risk in Europe is that locks will be expanded and that business in the US could rise sharply as the UK COVID variant spreads.”
This week, it will focus on earnings-driven corporate results, which include BofA, Morgan Stanley, Goldman Sachs and Netflix.
The weak US data helped compare to Treasury’s recent strong losses, with ten-year returns trading at 1,087%, up from 1,187%.
The more sober state of mind has in turn boosted the safe haven US dollar and a bearish market very short. Speculators increased their net short dollar position to the largest since May 2011 in the week ended January 12th.
The dollar index rose sharply to 90,837, and away from the recent 2-1 / 2-year low at 89,206.
The euro retreated to $ 1.2068, from its January high of $ 1.2349, while the dollar on the yen remained stable at 103.93 and well above the recent low of 102.57.
Biden’s choice for Treasury Secretary Janet Yellen is expected to rule out a weaker dollar when he testifies at Capital Hill on Tuesday, the Wall Street Journal reported.
Gold prices were undermined by the refusal of the dollar to drop the metal to $ 1,812 per ounce compared to the January peak of $ 1,959.
Oil prices have become profitable over concerns that the proliferation of increasingly restricted connections would hurt global demand.
Brent crude futures fell 12 cents to $ 54.98 a barrel, while US crude fell 11 cents to $ 52.25.
Edited by Shri Navaratnam