Capital Goods Sector Q1FY19 earnings review – Profitability saves the day, order inflows remain muted

Asian equities were mixed Monday as traders look for clues from earnings reports, developments in the trade war and a meeting of central bankers in Jackson Hole later in the week to gauge the outlook for markets.

Japan’s shares fell, while stocks rose in Hong Kong and China. The dollar steadied and the 10-year Treasury yield was little changed. The offshore yuan was stable after signs China may be propping up the currency just as it prepares to restart trade negotiations with the U.S.

 

Bond traders are betting recent market turmoil won’t throw the Federal Reserve off its tightening course. They expect the Fed will raise rates at its next meeting and this week’s Jackson Hole symposium could provide clues as to whether such confidence is warranted as the spread between 2- and 10-year yields narrowed to the least since 2007 on Friday.

 

Elsewhere, Turkish markets are closed this week. That may mean low trading volumes and the possibility of sharp currency swings. 

 

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