Dollar Drops After Alabama Vote; Asia Stocks Mixed: Markets Wrap
The dollar dropped after a special election for a U.S. Senate seat that saw the Republican majority diminished, while stocks in Asia outside of Japan gained as investors await central bank decisions in Europe and America for clues on the policy path for next year.
Shares in Tokyo fell as the yen firmed, while Hong Kong stocks rallied. S&P 500 Index futures declined and the Bloomberg dollar index dropped as the greenback fell against its peers after news that the Democratic candidate won in Alabamas Senate race. This will potentially make it harder for President Donald Trump to pass his priorities next year, though it may have little implication for the tax-cut legislation currently being debated in Congress.
U.S. equities posted fresh all-time highs overnight after data showed signs of inflation in producer prices.
The Federal Reserve is expected to raise interest rates after its meeting on Wednesday, and its anticipated that the European Central Bank will reveal details of plans to taper asset purchases on Thursday. Comments on the outlook for 2018 will be the focus for investors as they weigh the impact of coming policy normalization on global asset prices.
Investors were closely watching the result in Alabamas Senate race. The Associated Press projected Democrat Doug Jones as the winner over Republican Roy Moore, who faced sexual misconduct allegations. Republicans currently hold 52 of the 100 seats in the chamber. The winner probably wont be certified until late December, after the expected vote on business-friendly tax cuts.
The Australian dollar got a nudge higher after Westpacs December consumer confidence climbed.
Here are some of the key events scheduled for this week:
Fed policy makers announce their decision on Wednesday. The ECB, Bank of England and Swiss National Bank set monetary policy at their respective meetings on Thursday. Among top U.S. economic reports are consumer inflation on Wednesday and retail sales on Thursday. European lawmakers continue to debate Brexit and weigh moves on the next step, while North America Free Trade Agreement negotiators meet again.
And these are the main moves in markets: Stocks
The Topix index was down 0.2 percent at the close in Tokyo and the Nikkei 225 Stock average fell 0.5 percent. Australias S&P/ASX 200 Index ended 0.1 percent higher. Westfield Corp. was the biggest gainer on the benchmark, surging 14 percent, after Paris-based Unibail-Rodamco SE agreed to buy the global mall operator for almost $16 billion. The Kospi index was up 0.7 percent in Seoul. Hong Kongs Hang Seng Index rose 1.1 percent and the Shanghai Composite Index was up 0.3 percent. S&P 500 Index futures fell 0.1 percent, paring a slide of as much as 0.3 percent. The underlying gauge rose 0.2 percent to reach a record 2,664.11. The MSCI Asia Pacific Index climbed 0.3 percent.
The Bloomberg Dollar Spot Index fell 0.1 percent, its first retreat in more than a week. The euro was at $1.1757, up 0.1 percent. The yen rose 0.2 percent to 113.32 per dollar. The Aussie dollar gained 0.3 percent to 75.77 U.S. cents after climbing for the previous two days to the highest in more than a week.
The yield on 10-year Treasuries was steady at 2.40 percent. Australias 10-year yield was little changed at 2.52 percent.
West Texas Intermediate crude was steady at $57.55 a barrel. Gold held at $1,244.07 an ounce.
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