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Asian futures pace US gains as euro holds jump; bonds decline

Tuesday, January 27, 2015 - 08:02

[NEW YORK] Asian index futures advanced with US stocks, while the euro held gains versus major peers amid optimism the actions of Greece's new government won't force the nation's exit from the currency bloc. Australian bonds fell.

Futures on Japan's Nikkei 225 Stock Average climbed more than 1 per cent in Osaka and Chicago, as contracts on indexes from Sydney to Seoul increased. The Standard & Poor's 500 Index added 0.3 per cent in New York, with trading volumes below average amid forecasts for a blizzard. The euro was steady after gaining at least 0.3 per cent against the yen and the dollar Monday, while ruble forwards weakened after Standard & Poor's cut Russia's credit rating to junk. Ten-year Australian bond yields rose four basis points, pacing gains in Treasury rates.

European finance ministers have signaled their willingness to work with Greek Prime Minister-elect Alexis Tsipras, as long as the leader of the victorious Syriza Party drops his demand for a debt writedown. China will report on industrial company profits today, while Sri Lanka reviews interest rates and the Philippines posts trade data. The Federal Reserve starts a two- day meeting to review US interest rates and monetary policy for the first time in 2015.

"Markets largely took the Greek election result in their stride, despite the anti-austerity Syriza Party performing better than the opinion polls predicted," Sharon Zollner, a senior economist in Auckland at ANZ Bank New Zealand Ltd., wrote in a client note e-mailed today. "Uncertainty is likely to remain elevated until we get clear confirmation from Syriza that they will negotiate constructively with creditors. There is a giant game of chicken going on, no one wants a 'Grexit'." Asian Futures Nikkei 225 futures rose 1.5 per cent to 17,665 on the Chicago Mercantile Exchange, after contracts traded in Osaka climbed 1.3 per cent to 17,670 by 3 am local time. Futures on Australia's S&P/ASX 200 Index, which was closed yesterday for a holiday, added 0.2 per cent in most recent trading, while contracts on the Kospi index in Seoul advanced 0.4 per cent. Futures on stock indexes in Hong Kong were up 0.3 per cent.

The euro was little changed at US$1.1243 after erasing a loss of as much as 1 per cent to end Monday up 0.3 per cent. The 19- nation currency was steady at 133.20 yen following a 0.9 percent jump last session. One-month forwards on the rouble retreated a second day, declining 3.2 percent after a 7.1 per cent slump in the currency against the dollar Monday.

Volumes in the S&P 500 were 6.5 per cent below their 30-day average, according to data compiled by Bloomberg. The New York Stock Exchange said it plans to operate on a normal schedule Tuesday amid forecasts for a snowstorm on the east coast.

New York officials told residents to stay at home as a blizzard forecasters are calling "life-threatening" approached the city. All physical and electronic operations will be fully available with core operations staff and market participants on site Monday and Tuesday, the NYSE said in an e-mail.

Yields on Australian government notes due in a decade rose four basis points, or 0.04 percentage point, to 2.58 percent. Similar maturity Treasuries yielded 1.83 per cent Monday, up three basis points following last week's four basis-point decline.

Gold was little changed at US$1,281.66 an ounce on the spot market after falling 1 per cent in a second day of declines Monday. West Texas Intermediate crude ended the session down 1 per cent to a more-than six-year low of US$45.15 a barrel amid ongoing concern over the global supply glut for oil.

BLOOMBERG