GLOBAL MARKETS-Asia shares firm to near 10-year high ahead of U.S. data, China Congress

From Reuters - October 12, 2017

TOKYO (Reuters) - Asian stocks held firm near a 10-year high on Friday thanks to expectations of brisk global growth, although investors held off chasing the shares higher ahead of U.S. and Chinese economic data as well as the Chinese Communist Party congress next week.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent, having gained 3.4 percent so far this month. Japan's Nikkei .N225 was little changed.

Wall Street shares dipped slightly on Thursday, pulled down by a fall in AT&T (T.N) after the telecoms company reported subscriber losses in its cable TV business.

But MSCIs .MIWD00000PUS broadest gauge of the world stocks exchanges covering 47 markets hit another record high, extending its gains so far this year to 17 percent.

On top of a broad consensus that the global economy is in its best shape in recent years, expectations of a tax cut by U.S. President Donald Trump are adding appeal.

While we dont know the details of the tax reforms, the announcement of a plan to make the biggest tax overhaul in three decades triggered a fresh wave of reflation trade, said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

In currencies, the dollar lost some steam in recent days as U.S. bond yields appeared to have peaked for now, with minutes from the last U.S. Federal Reserve meeting showed policymakers remained divided on U.S. inflation prospects.

The next big test for the dollar is U.S. consumer inflation figures due later in the day.

The data will likely be disrupted by the hurricanes. Butif inflation is picking up, that is still positive for the dollar, said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

On top of the near-term inflation readings, investors are also looking to who Trump will nominate as successor to Fed Chair Janet Yellen, whose term expires next February.


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