Dollar Rises With U.S. Yields; Asia Stocks Drift: Markets Wrap

(180410) -- NEW YORK, April 10, 2018 (Xinhua) -- Traders work at the New York Stock Exchange in New York, the United States, on April 10, 2018. U.S. stocks closed higher on Tuesday. The Dow Jones Industrial Average gained 428.90 points, or 1.79 percent, to 24,408.00. The S&P 500 added 43.71 points, or 1.67 percent, to 2,656.87. The Nasdaq Composite Index was up 143.96 points, or 2.07 percent, to 7,094.30. (Xinhua/Wang Ying) - Wang Ying -//CHINENOUVELLE_CnynysE000048_20180411_TPPFN0A001/Credit:CHINE NOUVELLE/SIPA/1804110900

Most Asian stocks gained Monday as U.S. equity futures jumped in the wake of news that the Sino-American trade war is on hold for now. Treasury yields nudged higher, taking the dollar with them.

Equity benchmarks rose in Hong Kong, China and Korea, while they were little changed in Japan and Australia. FTSE 100 futures climbed with S&P 500 Index contracts. Oil futures rose. U.S. Treasury Secretary Steven Mnuchin said the U.S. was “putting the trade war on hold,” amid progress in talks with China. The euro touched fresh lows for the year after Italy’s two populist parties agreed on a prime minister.

“The trade talks over the weekend suggest that real trade-war outcomes are very unlikely,” Robert Mead, co-head of Asia-Pacific at Pacific Investment Management Co., said in a Bloomberg Television interview. “This seems to suggest that global trade stays healthy -- we don’t have to worry too much about that.” Mead said the dollar rally “probably has a bit further to go.”

Investors this week will be keeping a close eye on the minutes of May’s Federal Reserve meeting, to be released Wednesday, along with preliminary purchasing manager indexes in the euro zone. Geopolitics remains in focus as South Korea’s president visits Washington to discuss North Korea and Brexit negotiations resume in Brussels.

Elsewhere, emerging-market currencies continued to come under pressure. The Indonesian rupiah weakened as an interest-rate hike last week failed to stem a sell-off, and the central bank vowed to continue to intervene in the foreign-exchange and bond markets. The Malaysian ringgit dropped for a ninth day, on course for the longest stretch of losses since November 2016. Gold declined.

These are some key events to watch this week:

On Monday, Philadelphia Fed President Patrick Harker, Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari all speak at various events. Brexit negotiations resume in Brussels Tuesday, and South Korea’s president visits Washington to discuss North Korea Also Tuesday, Facebook founder/CEO Mark Zuckerberg is to be grilled by the European Parliament on his company’s use of personal data. Federal Reserve releases minutes of policy makers’ May 1-2 meeting on Wednesday; U.S. new home sale also released as are euro-area and Japan PMIs Thursday sees the Bank of England Markets Forum at Bloomberg London. Speakers include BOE Governor Mark Carney and New York Fed President William Dudley At the St. Petersburg Forum Friday, Presidents Putin and Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News editor-in-chief John Micklethwait Also Friday, European Union finance ministers discuss the latest on Brexit talks, in Brussels.

These are the main moves in markets: Stocks

Japan’s Topix index was little changed at the close in Tokyo. Australia’s S&P/ASX 200 Index fell less than 0.1 percent. Kospi index gained 0.2 percent. Hang Seng Index rose 1 percent. Shanghai Composite Index was up 0.8 percent. S&P 500 futures were up 0.6 percent. The S&P 500 closed down 0.3 percent on Friday. FTSE 100 futures gained 0.5 percent as of 7:02 a.m. in London. The MSCI Asia-Pacific Index fluctuated.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent. It climbed 0.3 percent Friday. The Japanese yen fell 0.5 percent to 111.34 per dollar. The euro fell 0.2 percent to $1.1744. The pound lost 0.3 percent to $1.3435. The rupiah slid 0.3 percent to 14,195 per dollar.

Bonds

The yield on 10-year Treasuries rose almost two basis points to 3.07 percent after sinking six basis points on Friday. Australia’s 10-year bond yield fell two basis points to 2.88 percent. German 10-year bund yields were steady at 0.58 percent.

Commodities

West Texas Intermediate crude rose 0.8 percent to $71.86 a barrel Monday. Gold lost 0.5 percent to $1,286.63 an ounce. Copper futures rose 0.3 percent to $6,872.50 a metric ton.

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