Dollar Hits 12-Week Low on Trump, Nikkei to Slide: Markets Wrap 

• Dollar strengthens after falling Tuesday on Trump comments
• Japan shares erase early losses while Hong Kong stocks slump

Asian stocks were mostly higher while the dollar stabilized after its worst month since March as investors weighed the impact of Donald Trump’s policies ahead of a Federal Reserve policy decision.

Japan’s Topix gained after reversing an early decline, while Hong Kong stocks slumped as trading resumed after a holiday. The greenback strengthened against almost all its major peers, after dropping Tuesday as the Trump administration reiterated its preference for a weaker currency. Oil stayed below $53 a barrel, while gold retreated after its best rally since June. Apple Inc. shares jumped in after-hours U.S. trading as earnings beat estimates.

The dollar slid Tuesday after Trump said China and Japan play their money markets and trade adviser Peter Navarro called the euro “grossly undervalued.” Several currency strategists alleged the claim against the euro is “false” and urged people to “ignore” Navarro, while Japan’s top currency official said the country doesn’t manipulate the yen and its monetary policy is done for purely domestic reasons.

The currency comments came as investors assessed the fallout from Trump’s executive order on immigration. The political drama has dimmed enthusiasm for the administration’s pro-growth promises and overshadowed data showing the global economy may be firming. Investors are also contending with a spate of corporate results before the Fed’s latest interest-rate decision.

What’s coming up in the markets:

• The Fed is expected to leave lending rates where they are, though its statement on Wednesday in Washington will be parsed for any reading on Trump’s impact on the world’s largest economy.
• Facebook Inc. and Amazon.com Inc. are among the major U.S. companies due to report results this week. Of the S&P 500 names to report so far, 73 percent have topped profit estimates.

Stocks

• The MSCI Asia Pacific Index was little changed as of 2:30 p.m. in Tokyo, with almost 5 shares advancing for every 3 that declined. The regional gauge advanced 4.9 percent last month for its best performance since July.
• The Topix climbed 0.3 percent, after retreating as much as 0.9 percent earlier in the day. Australia’s S&P/ASX 200 Index rose 0.6 percent, while South Korea’s Kospi added 0.6 percent.
• India’s Sensex was up 0.1 percent as the government presented its annual budget.
• Hong Kong’s Hang Seng index fell 0.8 percent as trading resumed after a two-day break. The Hang Seng China Enterprises Index lost 1 percent. China’s official manufacturing purchasing managers’ index was a touch above expectations in January, suggesting stable growth heading into 2017.
• Markets in China, Taiwan, Malaysia and Vietnam remained closed for a holiday.
• Contracts on the S&P 500 rose 0.1 percent. The benchmark for American equities advanced 1.8 percent in January for a third monthly gain, and is higher by more than 6 percent since Nov. 8.
• Apple shares were up 3 percent in after-hours trading, after the company reported quarterly revenue that topped analyst projections, fueled by demand for the company’s latest and priciest iPhones.

Currencies

• The yen fell 0.3 percent to 113.19 per dollar, after climbing 0.9 percent on Tuesday to complete its best monthly rally since June’s Brexit-fueled surge.
• The Bloomberg Dollar Spot Index added 0.1 percent, after completing a 2.6 percent loss for January and sliding to its lowest level since Nov. 11.
• The New Zealand dollar slid 0.5 percent to 72.73 U.S. cents after data showed the nation’s unemployment rate unexpectedly jumped.

Bonds

• The yield on the 10-year U.S. Treasury note added two basis points to 2.47 percent. It fell four basis points on Tuesday, leaving the rate little changed on the month.
• The rate on similar maturity Australian notes increased two basis points, after the debt rose in January to snap a four-month slide.
• AT&T Inc. launched a $10 billion deal on Tuesday after Microsoft Corp. sold $17 billion in debt a day earlier. Those deals pushed January issuance past the all-time monthly record of $180 billion in May 2016, according to data compiled by Bloomberg.

Commodities

• West Texas Intermediate crude fell 0.2 percent to $52.71 a barrel as the benefit of a weaker dollar was offset by speculation U.S. supplies gained. Oil slipped 1.7 percent in January for its first monthly drop since October.
• Gold fell 0.2 percent to $1,208.25, after capping a 5.5 percent monthly gain, its best performance since June.

Source: Bloomberg

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