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Asian stocks mixed as traders await China data

Stocks in Asia were mixed as investors awaited trade data from China that will provide further signs on the country’s economic recovery.

Shares fell in Hong Kong and South Korea, but rose in Japan, where investors parsed earnings from major local firms.

Futures for the S&P 500 and Nasdaq 100 both edged lower in Asia. The S&P 500 ended Monday fractionally higher after jumping 1.9% Friday. The tech-heavy Nasdaq 100 gained 0.3% as AI-capable chipmakers Advanced Micro Devices Inc. and Nvidia Corp. rose alongside Google-parent Alphabet Inc.

China is forecast to report a second month of export growth in April as global demand rebounds. The world’s second-largest economy surprised markets when its exports exceeded estimates in March.

“If we look at the exports statistics, we’re seeing very significant and ahead-of-expectation strength coming out of the export sector,” James Sullivan, head of Asia Pacific equity research at JPMorgan Chase & Co., said on China’s economy on Bloomberg Radio. “That’s counter to what we’re seeing particularly out of tech exports in Korea and Taiwan, and it’s very clear evidence that there’s not a lot of decoupling actually going on on the ground.”

The dollar crept higher in early Asian trading, heading for a second day of gains. The greenback reversed earlier losses Monday after the Federal Reserve’s Senior Loan Officer Opinion Survey signaled the credit market was tightening slightly, while business loan demand was weakening. Australian and New Zealand bond yields opened higher on Tuesday.

Treasuries were little changed in Asia trading hours after falling Monday as investors considered what it would take to finally reverse the Fed’s path on rates. Bond trading desks are bracing for as much as $35 billion of corporate debt sales this week, while Apple Inc. kicked off a $5.25 billion sale.Investors will be watching US President Joe Biden and congressional leaders as they are set to discuss the debt-ceiling issue. Meanwhile, consumer-inflation data Wednesday may provide further clues on the Fed’s path and set the tone for equities.

Debt Ceiling Impasse
For the time being, the debt ceiling impasse is offering a short-term yield opportunity, according to Asia Pacific strategists at Saxo Capital Markets, including Charu Chanana.

“Further concerns on credit tightening or delays in debt ceiling solution could continue to drive up short-term Treasury yields, potentially in three months, as investors hedge against a possible default,” they wrote in a note. “The yield on a T-bill maturing at the end of this month is ~4.5%, but there’s a 60-90 basis-point premium for bills maturing in June and July, reflecting the tension in markets.”

Attention in Asia will turn to Australia, where the government is set to announce its first budget surplus since 2008. Windfall tax revenue from high employment and elevated commodity export prices combine to swell the government’s coffers.

Elsewhere in markets, oil edged lower as investors assessed a complex outlook for global demand after a period of volatile trading. Gold was little changed and Bitcoin held below $28,000.

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