The Euro and Japanese Yen fell, Dollar strengthened; Key events to watch this week
Stocks in Asia declined Tuesday, while the dollar strengthened and 10-year Treasury yields rose back above the 3 percent mark as investors assessed the outlook for global trade relations and increased tensions in the Middle East.
Equity benchmarks dropped in Hong Kong, Korea and Australia, and pared early gains in Japan. Chinese stocks fluctuated after a slew of data showed economic momentum broadly held up. U.S. futures pointed to a lower open. Treasury yields climbed above 3 percent after dipping below that level earlier and the dollar extended gains against a basket of its Group of 10 peers.
Investor focus returned to trade ahead of a meeting in Washington between U.S. and Chinese officials this week. While President Donald Trump’s move to get China’s beleaguered ZTE Corp. back on its feet provided a sign that he may be open to easing trade tensions, the messages from his administration appear to be mixed. Commerce Secretary Wilbur Ross said the U.S. is exploring alternatives to punish ZTE for breaking sanctions law separately from trade negotiations, a comment that later appeared to be contradicted by Trump.
Elsewhere, oil recovered to around $71 a barrel on reduced supply. The Turkish lira hit its day’s low after President Recep Tayyip Erdogan said he intends to tighten his grip on the economy and take more responsibility for monetary policy if he wins an election next month.
These are some key events to watch this week:
- China plans to send Vice Premier Liu He to Washington for more trade talks.
- European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the U.K.
- China releases data including industrial production and retail sales figures Tuesday.
- U.K. Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union.
- U.S. retail sales, industrial production are due this week.
- Vodafone Group, Home Depot, Credit Agricole, Tencent, Cisco Systems, Burberry Group, Walmart, Vivendi, AstraZeneca, Deere, Fujifilm, Noble Group, and Campbell Soup are among the companies releasing earnings this week.
These are the main moves in markets:
- The MSCI Asia Pacific Index sank 0.6 percent as of 2:06 p.m. Tokyo time.
- Topix index rose 0.1 percent.
- Hong Kong’s Hang Seng Index dropped 1 percent.
- Kospi index fell 0.6 percent.
- Australia’s S&P/ASX 200 Index fell 0.5 percent.
- Futures on the S&P 500 Index lost 0.2 percent.
- The Bloomberg Dollar Spot Index rose 0.2 percent.
- The Japanese yen fell 0.2 percent to 109.89 per dollar.
- The euro dropped 0.1 percent to $1.1917.
- The yield on 10-year Treasuries gained more than one basis point to 3.0171 percent.
- Australia’s 10-year yield climbed five basis points to 2.82 percent.
- West Texas Intermediate crude was steady at $70.97 a barrel.
- Gold fell 0.1 percent to $1,311.84 an ounce.
- LME copper fell 0.4 percent to $6,857.50 per metric ton.