Asian stocks rose with US equity-index futures and the dollar rebounded from its lowest in more than two years as hurricane Irma’s force waned and as the United Nations prepared to vote on tougher North Korean sanctions.
Equities advanced in Tokyo, Seoul and Sydney as Treasuries fell. The dollar rose against major peers as Irma, while devastating, didn’t reach the feared Category 5 storm that some had expected and looks to have spared Miami. Markets in China will come into focus after inflation accelerated in August, exceeding estimates, and the yuan will be watched as China’s central bank is said to have removed a reserve requirement on the trading of foreign-exchange forwards.
Risk appetite returned to the markets as Irma’s strength ebbed, North Korea didn’t fire a missile test over the weekend as expected and as the chances of Federal Reserve interest rate increases this year receded after the US was struck by the first back-to-back major storms since 1964. New York Fed President William Dudley said in an interview with CNBC that hurricanes could affect the timing of rate hikes.
Still, the shadow of North Korea remains. Pyongyang warned of retaliation if the United Nations Security Council approves harsher sanctions in response to the North’s nuclear test. The UN will vote Monday on fresh sanctions against North Korea, saying that Kim Jong Un’s nuclear program poses the most serious threat since World War II. Pyongyang “is closely following the moves of the US with vigilance,” its state-run Korean Central News Agency said on Monday, citing a statement by the Ministry of Foreign Affairs.With Fed speakers now in a blackout period before next week’s policy meeting, the focus this week be on assessing the impact of natural disasters on US growth. Investors will also parse data due on retail spending in the American economy and the US consumer price index as inflation remains stubbornly low. US CPI is projected to have risen in August at a faster pace. – Bloomberg