Asian Stocks Set to Drift; Dollar Powers Higher: Markets Wrap

Pedestrians wait to cross a road in front of an electronic stock board outside a securities firm in Tokyo, Japan, on Thursday, Dec. 20, 2018. Japanese stocks entered a bear market as the last policy statements of the year from the Federal Reserve and Bank of Japan added to mounting investor concerns. Photographer: Kiyoshi Ota/Bloomberg , Bloomberg

Andreea Papuc, Bloomberg News

Feb 11, 2019

Share

(Bloomberg) -- Asian stocks looked set for a mixed day after a muted U.S. session as markets remain hostage to a crucial round of trade talks. The dollar strengthened for an eighth day, and 10-year Treasuries fell.

Futures were higher in Japan and Australia, while contracts in China and Hong Kong pointed lower. The S&P 500 Index finished little changed after drifting most of the session. The dollar entered its longest rally since January 2016, recouping its year-to-date losses, as central banks around the world tilt more to the dovish side, boosting the relative appeal of the greenback.

Investors are weighing the prospects for success of this week’s high-level U.S.-China trade talks ahead of a March 1 deadline for higher tariffs, while mulling the likelihood of a U.S. recession and its impact on earnings as reporting season rolls on. The threat of a shutdown in Washington also looms, with political tensions flaring again between Congress and the president.

Elsewhere, West Texas Intermediate crude slipped to its lowest close in two weeks, while gold headed for its first drop in three sessions. The pound stayed lower after the U.K. economy unexpectedly shrank in December.

Here are some key events coming up:

  • Earnings season continues with reports from companies including Michelin, Nissan, Cisco, Vivendi, Nvidia, Nestle, Coca-Cola and Credit Suisse.
  • Sweden’s Riksbank is expected to keep interest rates at minus 0.25 percent on Wednesday after the first increase in more than seven years in December.
  • Data Wednesday is expected to show U.S. consumer prices rose 0.1 percent in January, after falling 0.1 percent in December.
  • If no deal is reached on the U.S-Mexico border wall, parts of the federal U.S. government may shut down again later this week when stopgap government funding expires.

These are the main moves in markets:

Stocks

  • Futures on the Nikkei 225 rose 0.5 percent in Singapore.
  • Australia’s S&P/ASX 200 Index contracts were up 0.4 percent.
  • Hong Kong’s Hang Seng Index futures fell 0.1 percent.
  • The S&P 500 Index fell less than 0.1 percent.

Currencies

  • The Bloomberg Dollar Spot Index climbed 0.5 percent, hitting the highest in almost six weeks.
  • The Japanese yen dipped 0.6 percent to 110.38 per dollar, the weakest in more than six weeks.
  • The offshore yuan lost 0.2 percent to 6.8008 per dollar.
  • The euro fell 0.4 percent to $1.1276.
  • The British pound dropped 0.7 percent to $1.2861, the weakest in almost a month.

Bonds

  • The yield on 10-year Treasuries rose two basis points to 2.65 percent, the first advance in a week.

Commodities

  • West Texas Intermediate crude decreased 0.6 percent to $52.40 a barrel, the lowest in two weeks.
  • Gold sank 0.5 percent to $1,308.23 an ounce.

To contact the reporter on this story: Andreea Papuc in Sydney at apapuc1@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Cormac Mullen

©2019 Bloomberg L.P.