(April 10): Asian stocks were poised for declines Wednesday after renewed concern about a global economic slowdown and an escalation in trade tensions pushed U.S. stocks and Treasury yields lower.
Futures signaled losses in Japan, Hong Kong and Australia. The S&P 500 fell for the first time in nine sessions as the Trump administration threatened tariffs on the European Union and the International Monetary Fund cut its global growth outlook to the lowest since the financial crisis. Ten-year Treasury yields fell to 2.50 percent, while the greenback traded mixed against major currencies. The pound dropped as the EU looked set to force the U.K to delay Brexit for as long as a year.
Sentiment remains fragile, with the IMF’s latest report on global growth highlighting fears about a slowing world economy that has plagued markets for months. The U.S. and the EU appeared to open another front in their trade war, while negotiations with China remain unsettled. Federal Reserve minutes, American inflation data and a European Central Bank decision later this week could add to anxieties or help provide calm.
“Equity markets have been up for a really long time,” Josh Kutin, head of asset allocation for North America at Columbia Threadneedle Investments, said in an interview at Bloomberg’s New York headquarters. “It seems that there is just more and more data coming in which is suggesting the economy is slowing down.”
Elsewhere, Saudi Aramco, the world’s largest oil company, received more than $100 billion in orders for its debut bond sale, kick-starting an offering with yields likely to fall in line with or below Saudi Arabia’s sovereign debt. Israel’s stocks climbed with the shekel as the country went to the polls. Crude retreated from a five-month high.
Here are some notable events coming up:
U.S. banks begin reporting first-quarter earnings, led by JPMorgan and Wells Fargo. The spring meetings of the World Bank Group and the IMF continue in Washington. The Federal Reserve release minutes of its March meeting Wednesday. The ECB will probably leave its key interest rates unchanged Wednesday. Investors will be looking for further details on TLTRO.
These are the main moves in markets:
Futures on Japan’s Nikkei 225 slid 0.6 percent in Singapore. Hang Seng futures declined 0.4 percent. Futures on Australia’s S&P/ASX 200 Index dropped 0.2 percent. The S&P 500 Index fell 0.6 percent.
The yen was at 111.16 per dollar. The offshore yuan held at 6.7195 per dollar. The euro was steady at $1.1263. The British pound was little changed at $1.3054. The Bloomberg Dollar Spot Index dipped 0.1 percent Tuesday.
The yield on 10-year Treasuries sank two basis points to 2.50 percent.
West Texas crude fell 0.7 percent to $63.98 a barrel. Gold gained 0.1 percent to $1,305.14 an ounce. - Bloomberg