Asian Shares in Tight Range, Gold at Record High: Markets Wrap

(Bloomberg) — Asia’s benchmark stock index traded in a narrow range early Monday, while gold touched a record high as tensions in the Middle East stoked demand for the asset as a haven. 
Australian stocks gained, while Japanese equities slipped and Hong Kong equity futures signaled declines. US futures rose after the S&P 500 notched up a sixth straight weekly increase, its longest winning streak this year following a slew of corporate results and signs the world’s largest economy remains robust.
Financial markets are being shaped by wagers on the health of the US and Chinese economies on the one hand, and the impact of hostilities in the Middle East and geopolitics on the other. China’s banks are expected to cut their loan prime rates Monday after the central bank lowered its key rates in late September. The expected reduction comes as investors grow skeptical over a fleeting recovery in Chinese stocks following a swath of stimulus measures.
“How influential further easing proves to be in China and Hong Kong equities and the yuan is up for debate, as market participants may be feeling a sense of policy easing fatigue,” said Chris Weston, head of research at Pepperstone Group in Melbourne.
Silver, palladium and platinum all rose. Bullion edged higher to hit an all-time high of around $2,725 an ounce on news Israel is discussing its attack on Iran after a Hezbollah drone exploded near Prime Minister Benjamin Netanyahu’s private home. Crude was little changed after dropping 8.4% last week. 
Possible escalation in Middle Eat comes as finance ministers and central bank chiefs gather in Washington this week for the annual meeting of the International Monetary Fund and World Bank. Hanging over the meeting is the grinding Russia-Ukraine war and a toss-up US presidential election that offers starkly different economic outcomes for the world. 
Bitcoin flirted with $70,000, a level last seen since June, amid a spurt of demand for dedicated US exchange-traded funds.
Malaysia’s politicians are bracing for protests after committing to rolling back fuel subsidies from next year which also risk stoking inflation. Traders will also be closely watching the Indonesian rupiah after new President Prabowo Subianto confirmed Sri Mulyani Indrawati will stay on as finance minister, a sign of policy continuity in Southeast Asia’s largest economy. 
The reappointment of Indrawati in Prabowo’s administration “should be perceived positively by markets in terms of Indonesia’s medium-term fiscal consolidation narrative,” Barclays Plc strategists led by Themistoklis Fiotakis wrote in a note to clients.
In US earnings this week, Tesla Inc. faces questions on its production targets and regulatory challenges after the unveiling of its much-hyped Cybercab failed to enthuse investors and quell concerns over its recent vehicle sales.
Boeing Co. will also have to sooth investors increasingly concerned over production delays, depleted financial resources and labor strife. Striking workers will vote on Oct. 23 to ratify a tentative agreement on a new contract the company and their union reached at the weekend, including a wage increase of 35% spread over four years. 
Investors are positioning for the US election in about two weeks as odds tilt toward both Donald Trump winning the White House and Republicans controlling Congress. Traders have already begun ramping up bets on assets which had thrived in the wake of the former president’s 2016 victory, and are now looking to the impact on proposed policies including a lift in trade tariffs.
Some of the main moves in markets:
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This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess and Chris Bourke.
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