Stocks Shrug at Trade Tensions, Dollar Retreats: Markets Wrap
Asian stocks gained after U.S. jobs data bolstered optimism in the worlds largest economy, outweighing global trade tensions. The dollar and the yen weakened as demand for haven assets retreated.
While the MSCI Asia Pacific Index of stocks was on track to gain the most in more than two months, the shadow of a trade war may keep exuberance in check. China warned it will withdraw from commitments it made on trade if U.S. President Donald Trump carries out a separate threat to impose tariffs on the Asian country, and the U.S. is headed for a showdown with Americas allies at a Group of Seven summit this week.
Tokyo and Hong Kong stocks outperformed, and European stock futures advanced. The dollar pulled back after completing a seventh week of gains. The 10-year Treasury yields traded above 2.90 percent as investors turned their attention to the pace of Federal Reserve rate hikes after a strong American jobs report Friday.
The U.S. jobs data was a welcome relief for traders after a tumultuous week dominated by fears about the prospect of another euro-area crisis. Much of that seemed to have dissipated as the week ended -- in Italy, nationalist parties finally took power ending months of deadlock, while in Spain, the Socialist led-opposition ousted Spanish Prime Minister Mariano Rajoy with a no-confidence vote Friday.
With concerns about the euro area somewhat assuaged and emerging markets settling down after the recent sell-off, attention this week turns back to trade. The Group of Seven meets in Quebec later this week, with the European Union and Canada threatening retaliatory measures unless Trump reverses course on new steel and aluminum levies.
There is a lot of to-ing and fro-ing which so far hasnt led to the imposition of some of these threatened tariffs, but I think the tit-for-tat and the possibility that this will start to gain unwanted momentum is very important to the markets, John Wraith, head of U.K. macro rates strategy at UBS Group AG, told Bloomberg Television. That said, its somewhat of a slow burner, it takes time to have an impact and issues like the situation on the Korean Peninsula and recently the Italian political situation, they have more immediate impact.
Elsewhere, West Texas Intermediate crude was little changed after declining as rising U.S. output overshadowed a surprise drop in stockpiles, with traders also focused on whether Saudi Arabia and Russia will boost production. The won led an advance in Asian emerging-market currencies as risk-on sentiment prevailed with Europe political risks receding.
These are some key events to watch this week:
Apple Worldwide Developers Conference in San Jose, California, kicks off Monday. The company is expected to unveil projects such as new versions of iPhone and Mac operating systems. Reserve Bank of Australia monetary policy decision is out Tuesday. Tesla holds its annual shareholder meeting also Tuesday. U.S. ISM non-manufacturing index out Tuesday. Growth at U.S. service industries probably improved in May for the first time in four months, indicating the economy is strengthening after a first-quarter slowdown, economists forecast. Reserve Bank of India rate decision on Wednesday. U.S. trade balance and Australia GDP also out on Wednesday. On Thursday, Japanese Prime Minister Shinzo Abe meets with U.S. President Trump at the White House to discuss the planned U.S. summit with North Koreas Kim Jong Un. Also on Thursday, euro-zone GDP, Australia trade. Turkey rate decision is due on Thursday. Group of Seven Leaders Summit starts in Quebec Friday through to June 9.These are the main moves in markets:
The Topix index climbed 1.5 percent at the close in Tokyo. Australias S&P/ASX 200 Index gained 0.5 percent. South Koreas Kospi index was up 0.3 percent. Hang Seng Index added 1.5 percent. S&P 500 Index futures rose 0.1 percent. The S&P 500 climbed 1.1 percent Friday. FTSE 100 futures advanced 0.3 percent as of 7:01 a.m. in London. The MSCI Asia Pacific Index jumped 1.2 percent.
The Bloomberg Dollar Spot Index fell 0.2 percent. The Japanese yen fell 0.1 percent to 109.62 per dollar. The euro gained 0.3 percent to $1.1689. The Australian dollar climbed 0.6 percent to 76.16 U.S. cents after a gain in Australian retail sales.
The yield on 10-year Treasuries ticked added a basis point and was at 2.91 percent. Germanys 10-year bund yield gained one basis point to 0.4 percent.
West Texas Intermediate crude was little changed at $65.71 a barrel. It lost 1.8 percent Friday. Gold fell 0.2 percent to $1,291.13 an ounce.Rašyti komentarą