ChiXi Consultants – Asian Stocks Trade Lower on Tariff Concerns & Market Update
Asian stocks opened weaker after a reversal in U.S. equities on Friday, amid concern over whether trade tensions with China can be mended. The pound jumped on news of further progress in Brexit negotiations.
Politics, geopolitics and central banks will be the focus of the week for investors with the U.S. mid-term elections likely to dominate coverage early on, seen as a referendum on the policies of President Donald Trump. European traders will watch for further signs of progress on Brexit, with May due to discuss the latest proposals with her cabinet Tuesday. Investors then turn their eyes to the Federal Reserve, though officials are expected to keep the benchmark interest rate unchanged at their penultimate 2018 meeting Thursday.
Elsewhere, oil was on track for a sixth day of declines as sanctions on Iran oil snap back into place Monday.
Here are some key events coming up this week:
U.S. sanctions on Iranian oil flows go back into effect Monday. Chinese President Xi Jinping addresses the country's first International Import Expo EU's chief negotiator Michel Barnier delivers a speech on Brexit to the Grandes Conférences Catholiques in Brussels. On Tuesday, U.S. mid-term elections will determine whether Republicans keep control of Congress, and set the stage for Trump's 2020 re-election bid. Reserve Bank of Australia November policy decision Tuesday Federal Reserve policy makers are expected to leave the main interest rate unchanged Thursday at their penultimate gathering of 2018The Bank of Japan releases a summary of opinions from its Oct. 30-31 policy meeting. Trump plans to meet Russian President Vladimir Putin on the sidelines of Armistice Day celebrations Nov. 11.
And these are the main moves in the markets:
Japan's Topix index fell 0.9 percent as of 9:12 a.m. in Tokyo. Australia's S&P/ASX 200 fell 0.5 percent. South Korea's Kospi index was down 0.9 percent. Futures on the FTSE China A50 dropped 1.5 percent. Futures on the Hang Seng Index fell 2.4 percent. S&P 500 Index futures lost 0.3 percent. The S&P 500 Index closed down 0.6 percent. The Nasdaq 100 Index fell 1.5 percent.
The Japanese yen was little changed at 113.19 per dollar. The offshore yuan was steady at 6.8980 per dollar. The Bloomberg Dollar Spot Index was little changed. The euro traded at $1.1397, up 0.1 percent. The pound gained 0.3 percent to $1.3002.
The yield on 10-year Treasuries held at 3.12 percent after rising 8 basis points Friday. Australia's 10-year bond yield climbed more than three basis points to 2.73 percent.
West Texas Intermediate crude lost 0.3 percent to $62.98 a barrel. Gold edged up 0.1 percent to $1,234.42 an ounce.
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