Stocks Resume Drop, Asia Currencies Slide on Trade: Markets Wrap

Stocks dropped in Japan and South Korea, while developing-markets equities fell and European futures pointed to losses. Chinese shares failed to maintain gains as anxiety remained around the nation’s assets and the yuan stayed under pressure. The dollar was little changed while the MSCI Emerging Market Currency Index fell for a fourth session, heading for its worse quarter since the three months through September 2015.

White House economic adviser Larry Kudlow said that President Donald Trump’s decision not to adopt a more stringent approach on trade did not represent a softer stance on China. The comments re-established the White House’s hard line on trade as investors grapple with the implications of the on-again, off-again dust-ups with key partners. In China, the yuan’s fastest fall since its 2015 devaluation is adding a new dimension to already frayed tensions with America.

Elsewhere, the rupee slumped to an all-time low as a resurgence in crude oil prices and the emerging market selloff took its toll. Indonesia’s rupiah fell to the lowest level since October 2015 even as the central bank is expected to raise rates on Friday. Oil pared some of its jump to a level last seen in late 2014 after U.S. crude stockpiles tumbled by the most in almost two years.

These are key events coming up for the remainder of this week:

Indonesia monetary policy decision on Thursday. U.S. personal spending probably increased in May for a third month, economists forecast ahead of Friday’s data. China manufacturing and non-manufacturing PMI are due on Saturday.Here are the main market moves.

Stocks

Japan’s Topix index fell 0.3 percent at the 3 p.m. close in Tokyo. Australia’s S&P/ASX 200 Index rose 0.3 percent. South Korea’s Kospi index declined 1.1 percent. Hong Kong’s Hang Seng Index fluctuated. Shanghai Composite Index fell 0.5 percent and the CSI 300 Index of stocks traded both in Shanghai and Shenzhen declined 0.7 percent. S&P 500 futures rose 0.2 percent. The S&P 500 fell 0.9 percent. FTSE 100 futures fell 0.2 percent as of 7:05 a.m. in London. The MSCI Asia Pacific index fell 0.4 percent and is on course for its worse quarterly performance since the third quarter of 2015.

Currencies

The Bloomberg Dollar Spot Index was steady after advancing 0.6 percent to the highest in a week. The Japanese yen erased gains to be little changed at 110.30 per dollar. The euro traded at $1.1558.

Bonds

The yield on 10-year Treasuries held at 2.83 percent after falling five basis points. Australia’s 10-year bond yield lost one basis point to 2.62 percent.Commodities Gold was steady at $1,252.52 an ounce. West Texas Intermediate crude declined 0.4 percent to $72.46 a barrel in New York after rallying 3.2 percent.