(Bloomberg) -- Stocks were mixed in choppy trading on Monday as investors split their attention between the reopening of markets in mainland China, the plunge in Adani Group assets and looming interest rate decisions in the US and Europe.
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The Shanghai Shenzhen CSI 300 Index surged around 1%, putting it on course to close more than 20% above its October low and in a bull market as onshore exchanges reopened from the week-long Lunar New Year holiday.
Japanese and Australian equities swung between gains and losses while benchmark indexes in Hong Kong and Seoul were decisively lower.
This contrasts with more clear-cut optimism in bets that the Federal Reserve will slow the pace of rate hikes later this week, and to the advance on Wall Street Friday that saw traders brush off disappointing outlooks from some of the world's largest technology companies to push the Nasdaq 100 up 1%.
The broader outlook for the Fed is keeping downward pressure on the dollar, which has helped Asian markets outperform the US this year. China's pivot away from Covid Zero policies is also boosting the region, with indications over the last week that infections don't appear to have gotten out of control during the festive season, while consumption statistics have supported wagers for economic recovery.
Later in the Asian day attention will move to India, where the Adani Group has been under intense pressure, losing more than $50 billion in market value in two sessions. It's published a 413-page rebuttal of allegations of fraud by short seller Hindenburg Research in an effort to calm potential investors before a $2.5 billion share sale.
Midweek central banks will dominate the agenda, beginning on Wednesday with the Fed, which is expected to downshift to a 0.25% increase in interest rates amid signs of cooling inflation.
A report Friday showed the Fed's preferred inflation measures eased in December to the slowest annual pace in over a year and spending fell. Separate data from the University of Michigan showed US inflation expectations continued to retreat in late January, helping boost consumer sentiment.
"We look at the data flow and see a market that senses a positive outcome for risk assets and where pullbacks should be shallow," Chris Weston, head of research at Pepperstone Group Ltd., wrote in a note. He also cautioned that this is "one of the biggest weeks of absolute tier 1 event risk in recent memory," and added that the rise in commodities prices is concerning.
Treasury Secretary Janet Yellen said last week she's encouraged by recent data on inflation and jobs, but conceded the economy is at risk of recession.
The European Central Bank and the Bank of England are each projected to hike by a half basis point when they deliver decisions a day after the Fed.
The nascent year's tech resurgence gave the Nasdaq 100 its best week since November - with Tesla Inc. and Facebook parent Meta Platforms Inc. climbing at least 3% Friday. The gauge also notched its fourth straight weekly advance. That's even after a bleak forecast from Intel Corp. that followed recent worrisome remarks from Microsoft Corp. and Texas Instruments Inc.
Elsewhere in markets, a gauge of dollar strength was little changed on Monday and Group-of-10 currencies traded in relatively narrow ranges. The onshore yuan rallied in a catchup move.
Benchmark 10-year Treasury yields rose about one basis point. Rates on government bonds in Australia had similar moves.
Meanwhile, hedge funds are betting this year's stellar start for Treasuries is too good to last, quietly building up the biggest bearish bet on bond futures on record.
An aggregate measure of net-short non-commercial positions across all Treasuries maturities has hit 2.4 million contracts, according to the latest data from the Commodity Futures Trading Commission as of Jan. 24.
Oil fluctuated and gold slid after eking out a sixth weekly gain.
Key events this week:
International Monetary Fund's world economic outlook, Monday
China industrial profits, PMIs, Tuesday
Eurozone GDP, Tuesday
US Conference Board consumer confidence, Tuesday
Earnings Tuesday include: UBS, Unicredit, Snap and Advanced Micro Devices
Eurozone Manufacturing PMI, CPI, unemployment, Wednesday
US construction spending, ISM Manufacturing, light vehicle sales, Wednesday
FOMC rate decision, Fed Chair Jerome Powell press conference, Wednesday
Earnings Wednesday include: Meta Platforms and Peloton Interactive
Eurozone ECB rate decision, President Christine Lagarde press conference, Thursday
UK BOE rate decision, Thursday
US factory orders, initial jobless claims, US durable goods, Thursday
Earnings Thursday include: Alphabet, Apple, Amazon, Qualcomm and Deutsche Bank and Santander
Eurozone S&P Global Eurozone Services PMI, PPI, Friday
US unemployment, nonfarm payrolls, Friday
Some of the main moves in markets:
S&P 500 futures fell 0.3% as of 12:19 p.m. Tokyo time.
Nasdaq 100 futures fell 0.4%
Japan's Topix rose 0.1%
Australia's S&P/ASX 200 was little changed
Hong Kong's Hang Seng fell 1.3%
The Shanghai Composite rose 0.6%
Euro Stoxx 50 futures fell 0.3%
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0867
The Japanese yen fell 0.2% to 130.13 per dollar
The offshore yuan was little changed at 6.7549 per dollar
The Australian dollar fell 0.1% to $0.7090
Bitcoin fell 0.5% to $23,671.08
Ether fell 0.3% to $1,638.11
The yield on 10-year Treasuries advanced one basis point to 3.52%
Australia's 10-year yield was little changed at 3.57%
West Texas Intermediate crude was little changed
Spot gold fell 0.1% to $1,925.45 an ounce
This story was produced with the assistance of Bloomberg Automation.
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