Asian Stocks Decline, Yuan Slips as Policy Eyed: Markets Wrap

Publikuota: 2018-07-05
Passers-by walk past a stock quotation board outside a brokerage in Tokyo December 4, 2013. Most Asian shares slumped on Wednesday as the prospects of a reduction in the U.S. Federal Reserve's stimulus early next year prompted investors to cash in gains from recent rallies. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 percent after earlier hitting its lowest levels in almost two weeks, while Japan's Nikkei share average dropped 2.2 percent from a six-year closing high set on Tuesday. REUTERS/Toru Hanai (JAPAN - Tags: BUSINESS)
Passers-by walk past a stock quotation board outside a brokerage in Tokyo December 4, 2013. Most Asian shares slumped on Wednesday as the prospects of a reduction in the U.S. Federal Reserve's stimulus early next year prompted investors to cash in gains from recent rallies. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 percent after earlier hitting its lowest levels in almost two weeks, while Japan's Nikkei share average dropped 2.2 percent from a six-year closing high set on Tuesday. REUTERS/Toru Hanai (JAPAN - Tags: BUSINESS)
 

Asian stocks declined, with the region’s shares falling to the lowest in nine months, ahead of the planned implementation this week of trade restrictions between the U.S. and China. The yuan slipped despite the strongest fixing to its daily reference rate since October.

Shares in Tokyo, China and Hong Kong fell. Australian stocks outperformed while U.S. futures pared gains. Signs of contagion into European markets were limited as U.K. equity futures traded flat. Treasury yields ticked higher as trading resumed after the Independence Day holiday and the dollar steadied. Gold slipped after two days of gains.

Trader focus is shifting to a busy end to the week, with trade action looming alongside minutes from the last Federal Reserve meeting and American employment numbers for June. On the trade front, China has pledged it won’t implement tariffs before the U.S. is scheduled to do so on Friday, accounting for the difference in time zones.

Elsewhere, oil slipped below $74 a barrel as investors weighed tightening U.S. supplies against a pledge from Saudi Arabia to expand output.

These are key events coming up this week:

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 the 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

The MSCI Asia Pacific Index fell 0.8 percent to the lowest level since Oct. 2 at 2:17 p.m. in Tokyo. Japan’s Topix Index lost 1.1 percent. The Shanghai Composite dropped 0.6 percent and Hong Kong’s Hang Seng slid 1.2 percent. Korea’s Kospi declined 0.8 percent. S&P/ASX 200 Index bucked the regional weakness, rising 0.4 percent.

Currencies

The Bloomberg Dollar Spot Index was little changed. The euro was flat at $1.1654. The pound was little changed at $1.3221. The yen climbed 0.1 percent to 110.42 per dollar. The yuan slipped 0.2 percent to 6.64 per dollar.

Bonds

The yield on 10-year Treasuries rose one basis point to 2.84 percent. Australia’s 10-year yield climbed two basis point to 2.60 percent.

Commodities

West Texas Intermediate crude fell 0.5 percent to $73.86 a barrel. Gold slid 0.1 percent to $1,254.13 an ounce. LME copper gained 0.1 percent to $6,392.50 per metric ton.

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