Asia Stocks Slide, Yuan Resumes Retreat, Oil Falls: Markets Wrap

Publikuota: 2018-07-02
An investor monitors share market prices in Kuala Lumpur, Malaysia, August 25, 2015. Most Southeast Asian stock markets rebounded on Tuesday, helped by bargain hunting and share buyback plans of some companies, with Indonesian benchmark recovering from over 1-1/2-year low on Monday, but concerns over China's economy limited further gains. Indexes of Malaysia and Vietnam both rebounded from an early slide to new multi-year lows. The Philippines' benchmark stock index was a tad 0.09 percent lower after touching a 16-month low in early trading.  REUTERS/Olivia Harris.
An investor monitors share market prices in Kuala Lumpur, Malaysia, August 25, 2015. Most Southeast Asian stock markets rebounded on Tuesday, helped by bargain hunting and share buyback plans of some companies, with Indonesian benchmark recovering from over 1-1/2-year low on Monday, but concerns over China's economy limited further gains. Indexes of Malaysia and Vietnam both rebounded from an early slide to new multi-year lows. The Philippines' benchmark stock index was a tad 0.09 percent lower after touching a 16-month low in early trading. REUTERS/Olivia Harris.
 

Stocks dropped in Asia on Monday after capping their worst quarter since 2015 last month, as investors gird for U.S. tariff hikes on Chinese imports that could damp export demand across the region. Oil fell and the dollar headed higher.

Equity benchmarks fell in China, Japan and South Korea, with Hong Kong closed. The yuan weakened, extending its sharpest decline since China’s August 2015 devaluation, though today’s retreat was in keeping with peers such as the won. The euro came under pressure following deepening tensions in Germany’s coalition government. Oil slid below $74 a barrel in New York after U.S. President Donald Trump called for higher production.

Mexico’s peso rose after Andres Manuel Lopez Obrador, as expected, won the presidential vote by a landslide. With his business-friendly rivals vanquished, traders will be seeking clues on the incoming government’s economic policy.

Trade war jitters, political risk in Europe and divergence in monetary policy across the world remain some of the key themes investors are grappling with following the end of the first half. Factory data over the weekend added to concern that China’s growth is softening. This Friday’s payrolls report in the U.S. and minutes from the Federal Reserve’s most recent meeting could influence expectations for two more interest-rate increases this year.

Elsewhere, Chancellor Angela Merkel’s Christian Democratic Union party said Sunday it will pursue migrant pacts with its partners amid reports the German interior minister has resigned. Stances on Germany’s defense against migration is escalating a political crisis that could leave her without a parliamentary majority.

President Trump piled more pressure on OPEC over the weekend, demanding the cartel stop what he called its manipulation of the oil market and insisting the group pump more.

These are key events coming up this week:

U.S. manufacturing probably continued to expand at a robust pace in June, economists forecast ahead of Monday’s release. The Reserve Bank of Australia has a policy decision Tuesday. The U.S. celebrates Independence Day on July 4, Wednesday. Stock and bond markets are closed, along with government offices. Federal Reserve releases minutes of its June 12-13 meeting, when FOMC policy makers raised the benchmark rate a quarter point for the second time this year, and lifted their median forecast to four total increases in 2018. U.S. payrolls are due Friday. Also on Friday, the U.S. is scheduled to impose tariffs on $34 billion of Chinese goods. Beijing has said it will slap tariffs on an equal value on U.S. exports including agricultural and auto exports.

Here are the main market moves Stocks

Futures on the S&P 500 slid 0.2 percent as of 1:55 p.m. in Tokyo. The underlying gauge closed up 0.1 percent on Friday. Japan’s Topix index lost 1.4 percent, heading for its lowest level since April. Shanghai Composite fell 1.1 percent. South Korea’s Kospi tumbled 1.6 percent, set for its lowest level in more than a year. Australia’s S&P/ASX 200 Index reversed gains, losing 0.2 percent.

Currencies

The euro declined 0.3 percent to $1.1649. The pound fell 0.3 percent to $1.3175. The yen was little changed at 110.81 per dollar. The Bloomberg Dollar Spot Index rose 0.2 percent.

Bonds

The yield on 10-year Treasuries slipped about one basis point, to 2.85 percent. Australian 10-year bond yields slid three basis points to 2.60 percent.

Commodities

West Texas Intermediate crude fell 1.2 percent to $73.26 a barrel. Gold futures dropped 0.2 percent to $1,250.64 an ounce.

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