Stocks Mixed, Dollar Up as Korea Summit Underway: Markets Wrap

Publikuota: 2018-06-12
A TV screen shows a news report about the meeting between U.S. President Donald Trump and North Korea's leader Kim Jong Un at a media center for the summit, in Singapore June 12, 2018. REUTERS/Tyrone Siu     TPX IMAGES OF THE DAY
A TV screen shows a news report about the meeting between U.S. President Donald Trump and North Korea's leader Kim Jong Un at a media center for the summit, in Singapore June 12, 2018. REUTERS/Tyrone Siu TPX IMAGES OF THE DAY
 

Asian stocks traded mixed and the dollar rose as investors looked beyond weekend trade ructions to focus on the three major central bank meetings this week and the outcome of Tuesday’s historic summit between President Donald Trump and North Korea’s leader.

Equities from Tokyo to Sydney swung between gains and losses, struggling to establish any clear direction, as the meeting between Trump and Kim Jong Un got underway in Singapore. The yen trimmed losses as the greenback strengthened against its Group-of-10 peers and U.S. Treasury yields steadied. Earlier, the S&P 500 Index edged higher, though it gave up some gains just before the close. The pound extended a decline as Theresa May’s landmark Brexit legislation goes to Parliament. Oil recovered as cracks in a pipeline threatened Nigerian exports.

Investors are steeling themselves for geopolitical noise as the week picks up with Trump and Kim expressing optimism that the U.S. and North Korea can find a path toward peace. After the summit ends, traders will switch their focus to the views of the world’s biggest central banks. The Federal Reserve is expected to raise interest rates, while European Central Bank officials are poised to hold formal talks on ending its bond-buying program. The Bank of Japan meets Friday, with no change to policy expected.

“From investors’ point of view, we don’t have huge expectations for this meeting because it’s very difficult to predict what will happen,” Goohoon Kwon, co-head of Korea research and senior Asia economist at Goldman Sachs Group Inc. told Bloomberg Television. “Despite the historic event, the markets haven’t moved much because they’ve already discounted the risk of military conflict. Going forward, there could be some upside, but nonetheless that’s subject to the outcome of this summit, which is quite unpredictable, but also more importantly, follow through, execution, implementation.”

Meanwhile, Trump’s top economic adviser, Larry Kudlow, was “doing well” on Monday night after suffering a heart attack, a White House spokeswoman said.

These are some key events to watch this week:

President Donald Trump and North Korean leader Kim Jong Un’s meeting in Singapore Tuesday, which will be late Monday in New York, marks the first face-to-face encounter between a sitting U.S. president and a leader of North Korea U.K. Prime Minister Theresa May faces votes that could derail her Brexit policy, also Tuesday The Federal Reserve is expected to raise interest rates Wednesday as the U.S. economy remains solid The European Central Bank rates decision comes Thursday with a briefing from President Mario Draghi The Bank of Japan June monetary policy decision and news conference is Friday FIFA expects more than 3 billion viewers for the World Cup that begins this week in Russia.

And these are the main moves in markets: Stocks

Topix index rose 0.3 percent as of 12:54 p.m. in Tokyo. Kospi index fell 0.2 percent. Hang Seng Index rose 0.2 percent. Australia’s S&P/ASX 200 Index added 0.2 percent. Futures on the S&P 500 Index were flat. The MSCI Asia Pacific Index was little changed.

Currencies

The Bloomberg Dollar Spot Index rose 0.1 percent. The Japanese yen fell 0.2 percent to 110.29 per dollar. The euro fell 0.2 percent to $1.1765. The pound fell 0.1 percent to $1.3361.

Bonds

The yield on 10-year Treasuries was steady at 2.95 percent. Australia’s 10-year yield rose two basis points to 2.80 percent.

Commodities

West Texas Intermediate crude rose 0.1 percent to $66.16 a barrel. Gold declined 0.2 percent to $1,297.53 an ounce. LME copper fell 0.5 percent to $7,220.50 per metric ton.

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