Asia Stocks to Start Mixed; Oil Climbs on Iran

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(June 24): Asian stocks looked set for a mixed start to the week amid signs a global rally is stalling. Oil climbed as the U.S. said it was planning sanctions on Iran.

Futures in Japan pointed modestly lower, while Hong Kong contracts were little changed. S&P 500 futures opened steady after the gauge edged down Friday, pulling back from its all-time high reached in the previous session. The yen and the offshore yuan were steady. The yield on 10-year Treasuries ended last week at 2.05%. The Turkish lira surged after the opposition candidate won the redo of Istanbul’s mayoral race.

Investors are weighing geopolitical risks alongside a dovish shift from major central banks amid ongoing trade tensions between the U.S. and China. Next up comes a speech from Federal Reserve Chair Jerome Powell on Tuesday, then a meeting between U.S. President Donald Trump and Chinese President Xi Jinping on the sidelines of the Group of 20 summit in Japan at the end of the week to discuss the trade war.

Minneapolis Fed President Neel Kashkari said Friday he called for a 50 basis point reduction in interest rates at the central bank’s June 18-19 meeting. Federal Reserve Vice Chairman Richard Clarida said the argument in favor of cutting rates has strengthened recently as cross currents buffet the U.S. economy amid heightened uncertainty.

Meanwhile the U.S. plans to announce more sanctions against Iran, but President Donald Trump is also willing to negotiate with Iranian leaders with “no preconditions” to ensure the Islamic Republic never acquires a nuclear weapon. The sanctions would come days after the U.S. president abruptly called off a plan for air strikes.

Here are some key events coming up:

  • Reserve Bank of Australia Governor Philip Lowe speaks in Canberra Monday.
  • Fed Chair Jerome Powell speaks at the Council on Foreign Relations in New York Tuesday. He’ll discuss the challenges facing the U.S. economy.
  • MSCI Inc. announces results of its 2019 Market Classification Review on Tuesday, including whether Kuwait gets upgraded from frontier to emerging-market status.
  • Group of 20 summit in Osaka, Japan on Friday and Saturday.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index were flat as of 7:03 a.m. in Tokyo. The underlying gauge lost fell 0.1% Friday.
  • Futures on Japan’s Nikkei 225 dropped 0.4%.
  • Hang Seng futures were little changed.
  • Futures on Australia’s S&P/ASX 200 Index lost 0.3%.

Currencies

  • The yen was at 107.30 per dollar.
  • The offshore yuan held at 6.8639 per dollar.
  • The Bloomberg Dollar Spot Index fell 0.2%.
  • The euro bought $1.1374.
  • The lira rose 1.4% to 5.7349 per dollar.

Bonds

  • The yield on 10-year Treasuries increased two basis points to 2.05%.

Commodities

  • West Texas Intermediate rose 0.5% to $57.70 a barrel.
  • Gold increased 0.1% to $1,400.55 an ounce. - Bloomberg