Asia Stocks Slip as Global Rally Stalls on Trade: Markets Wrap

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Asian stocks declined as investors assessed ongoing trade tensions alongside data that played into the hands of those gunning for looser U.S. monetary policy. Oil steadied.

After a seven-day rally, global equities are showing signs of fatigue, with shares in Tokyo and Seoul opening lower Thursday. Earlier, the S&P 500 Index posted a modest decline, weighed down by energy, tech and financial shares. Treasuries steadied after a weak inflation report bolsteredthe case for Federal Reserve interest-rate cuts and dragged yields lower. The slump in oil eased after supply concerns sent crude tumbling. U.S. President Donald Trump said he had no deadline for China to return to trade talks, other than the one in his head.

Trump has threatened to raise tariffs on Chinese goods if President Xi Jinping doesn’t meet with him at the Group of 20 summit later this month in Japan. Commerce Secretary Wilbur Ross played down the chance of a meeting and stepped up the administration’s criticism of the Fed,urging the central bank to reconsider December’s rate hike. In the latest sign of demand for safe haven assets, an auction of 10-year bunds Wednesday drew an average yield of minus 0.24%, the lowest on record.

“Even though the Fed is still on investors’ side, some of the slowdown in international economies and the uncertainty over trade makes risk-reward at this level somewhat mixed,” Chris Konstantinos, chief investment strategist at Riverfront Investment Group, told Bloomberg TV. “We have actually taken in risk a little bit recently.”

Elsewhere, the pound remained volatile as Boris Johnson said he doesn’t want a no-deal Brexit but the country must prepare for one as a negotiating tactic. He is the favorite to replace Theresa May.

Here are some key events coming up:

  • The race to succeed Theresa May heats up with the first Conservative Party leadership ballot Thursday.
  • Euro-area finance ministers meet in Luxembourg Thursday. On the agenda: financial penalties for Italy over its debt load, and the euro-area budget.
  • China and the U.S. release industrial production, retail sales data Friday.

And these are the main moves in markets:

Stocks

  • Japan’s Topix index dipped 0.5% as of 10:04 a.m. in Tokyo.
  • South Korea’s Kospi index slid 0.2%.
  • Australia’s S&P/ASX 200 Index rose 0.2%.
  • Futures on the S&P 500 Index rose 0.2%. The underlying gauge fell 0.2%.

Currencies

  • The yen was at 108.51 per dollar.
  • The offshore yuan held at 6.9275 per dollar.
  • The Bloomberg Dollar Spot Index dipped 0.1%.
  • The euro bought $1.1293, little changed.

Bonds

  • The yield on 10-year Treasuries remained at 2.12%.
  • Australia’s 10-year yield held at 1.44%.

Commodities

  • West Texas Intermediate crude added 0.3% to $51.28 a barrel.
  • Gold held at $1,333.58 an ounce.

— With assistance by Todd White, and Vildana Hajric

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