Stocks, U.S. Futures Drop in Asia; Yen Ticks Up: Markets Wrap




 

(Bloomberg) -- Stocks dropped at the open in Asia, and U.S. futures declined, suggesting a resumption of the selling pressure investors have coped with for much of this quarter.

After the closing of American markets on Wednesday, S&P 500 Index futures had a volatile start Thursday, with market players scrambling to ascribe a reason for declines as deep as 1.9 percent at the start, before the loss was more than halved. Selling pressure was so intense it forced the CME Group to pause trading, data indicated. Equities in Japan, Korea and Australia declined, while the yen edged up.

While China's pledge on Wednesday to move quickly on trade commitments to the U.S. had helped ease selling pressure in equities yesterday, news that Canada has arrested the chief financial officer of Chinese tech giant Huawei and may extradite her to the U.S. could put a damper on sentiment. European equities were weaker overnight, while oil continues to trade below $53 a barrel in New York.

On Wednesday, the Canadian dollar sank as the Bank of Canada walked back some of its enthusiasm about the economic outlook. The pound edged higher as investors digested legal advice over Prime Minister Theresa May's Brexit deal, which confirmed that the so-called customs backstop -- the insurance mechanism that kicks in if the Irish border issue cannot be resolved -- could remain "indefinitely."

Investors are looking for progress on trade as well as clues to the future path of economic growth. U.S. President Donald Trump said China is sending "very strong signals" following trade discussions in Argentina, as uncertainty remains over what commitments were made between the two nations. The Federal Reserve's Beige Book economic report showed fading optimism over prospects for growth at U.S. firms even as a majority of districts continued to report a modest expansion in recent weeks.

"I'm not overly concerned," Kathryn Rooney Vera, Bulltick LLC head of research and chief investment strategy, told Bloomberg TV. "If in fact we do get a melting of tensions, actual action, and an improvement on the trade relationship between the U.S. and China -- I would contend we're actually seeing that right now -- then optimism can certainly bounce back."

Elsewhere, West Texas oil prices slid back below $53 a barrel as traders await this week's critical OPEC gathering. Bitcoin extended losses, dropping below $3,800.

Some of the key events investors will be focused on this week:

Friday brings the U.S. monthly employment report for November.China November trade data are due on Saturday.

And here are the main moves in markets:

Stocks

Japan's Topix Index fell 0.5 percent as of 9:08 a.m. in Tokyo. Hang Seng futures added 0.1 percent overnight.Australia's S&P/ASX 200 Index fell 0.2 percent. Futures on the S&P 500 Index fell 0.7 percent.Kospi Index was down 0.6 percent

Currencies

The yen rose 0.1 percent to 113.07 per dollar. The offshore yuan slipped 0.1 percent to 6.8690 per dollar. The Bloomberg Dollar Spot Index rose 0.2 percent Wednesday.The euro bought $1.1347.The British pound was at $1.2729.

Bonds

10-year Treasury yields were little changed at 2.92 percent.The yield on Australia's 10-year bonds were little changed at 2.49 percent.

Commodities

West Texas Intermediate crude fell 0.3 percent to $52.76 a barrel, after reaching the highest in two weeks.Gold was little changed at $1,237.81 an ounce.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.net

For more articles like this, please visit us at bloomberg.com

©2018 Bloomberg L.P.

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