(June 13): Asian stocks faced more pressure Thursday after U.S. equities slipped amid ongoing trade tensions. Treasuries climbed as slower-than forecast inflation bolstered the case for Federal Reserve interest-rate cuts.
Futures in Japan, Hong Kong and China pointed lower. The S&P 500 Index posted a modest decline, weighed down by energy, tech and financial shares. Crude oil slumped to the lowest since January on concern the trade dispute between the U.S. and China could trip up the global economy. The dollar climbed. 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. 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.
“We have total opposing forces at play: trade and the Fed,” Jennifer Ellison, principal at San-Francisco based BOS, said in an interview at Bloomberg’s New York headquarters. “They’re balancing each other out, which is perhaps a good thing. But it’s not a time to just be exuberant and assume things will continue the way they have.”
Elsewhere, the Stoxx Europe 600 index posted its first drop in four sessions.
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:
- The S&P 500 Index fell 0.2%.
- Futures on Japan’s Nikkei 225 slid 0.2% in Singapore.
- Hang Seng futures dipped 0.4%.
- Futures on Australia’s S&P/ASX 200 Index were flat.
- The yen was at 108.49 per dollar.
- The offshore yuan held at 6.9281 per dollar.
- The Bloomberg Dollar Spot Index rose 0.3%.
- The euro bought $1.1289.
- The yield on 10-year Treasuries decreased two basis points to 2.12%.
- West Texas Intermediate crude fell 4.1% to $51.08 a barrel, the lowest since January.
- Gold held at $1,333.55 an ounce. - Bloomberg