2018-08-03 12:53

Yuan Extends Drop; Stocks Ending Rough Week Mixed: Markets Wrap

Mike'o Segaro („Reuters“ / „Scanpix“) nuotr.

Bloomberg Asian stocks were mixed on Friday, ending the worst week for the region’s shares since March, amid ongoing trade tensions. The yuan extended losses to reach fresh lows, while Japanese yields edged lower after a tumultuous week for the bond market.

Shares in Japan and Hong Kong dropped, while equities in South Korea and India gained. The Shanghai Composite steadied but remains on course for a near four percent slide this week. The dollar maintained gains and the yield on 10-year Treasuries ticked back below 3 percent. China’s currency headed for an eighth weekly decline, the longest run since the start of the country’s modern foreign-exchange rate regime in 1994.

The gloom on trade is coming up against a mostly-positive earnings season and an upbeat message on the American economy delivered by the Federal Reserve on Wednesday. Of the almost 400 members of the S&P 500 that have reported earnings this season, about 85 percent of them beat analysts’ estimates. Data due Friday will probably show that the U.S. economy added jobs at a healthy clip again in July.

Elsewhere, 10-year JGB yields slipped to 0.11 percent. Turkey’s lira, bonds and stocks extended their slide after the U.S. imposed sanctions on two government ministers over the detention of an evangelical pastor.

Oil rallied from the lowest level in more than a month amid signs the drain from the biggest U.S. supply hub will continue. The pound maintained losses after the Bank of England’s hawkish rhetoric failed to convince investors of a brighter economic outlook.

Here are some events to watch out for during the remainder of this week:

Earnings season continues with Berkshire Hathaway among companies reporting results. Toyota Motor Corp. reported first-quarter profit that beat analysts’ estimates and said it is preparing for challenges in a U.S. market potentially hit by a trade war. The U.S. jobs report is on Friday, and is predicted to show a healthy labor market, with 193,000 new jobs.These are the main moves in markets:

Stocks

Japan’s Topix index declined 0.5 percent at 3 p.m. close in Tokyo. Hong Kong’s Hang Seng fell 0.1 percent. The Shanghai Composite gained 0.3 percent. Australia’s S&P/ASX 200 was flat. South Korea’s Kospi and India’s S&P BSE Sensex both rose 0.7 percent. Futures on the S&P 500 Index were flat after the underlying gauge rose 0.5 percent Thursday.

Currencies

The yen was steady at 111.68 per dollar. The offshore yuan lost 0.1 percent to 6.8860 per dollar after losing 0.8 percent. The Bloomberg Dollar Spot Index edged up after rising 0.4 percent to a two-week high on Thursday. The euro bought $1.1591. The pound traded at $1.3019 after dropping 0.8 percent. The Turkish lira decreased 1.5 percent to a record low.