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(Bloomberg) -- Asian shares are set to open lower Thursday after Trump administration official’s rhetoric on trade and the dollar roiled financial markets, sending the U.S. currency to its lowest level in three years and whipsawing stocks that had been buoyed by strong earnings.

The S&P 500 closed flat after swinging between gains and losses. The threat of tit-for-tat tariffs weighed on technology stocks and industrial shares also fell. Futures in Australia and Japan point to declines. The yen pushed through 109 per dollar and Treasuries dropped. Commodities surged, with West Texas Intermediate oil climbing above $65 a barrel for the first time in more than three years.

Treasury Secretary Steven Mnuchin’s endorsement of a weak dollar added to pressure on a greenback that’s been in decline for a year, although White House Press Secretary Sarah Sanders appeared to soften his comments later. The euro rose to the highest since 2014 as eyes turn to the European Central Bank’s policy meeting on Thursday, where traders will be looking for for further clues on its appetite for rolling back stimulus, and its officials’ thoughts on a strengthening currency.

Investor focus on global trade has intensified after the U.S. officials’ comments added to President Donald Trump’s protectionist push days after his administration slapped tariffs on solar panels and washing machines. Commerce Secretary Wilbur Ross’s suggestion that the U.S. could enact more levies touched off concerns of a trade war that could hamper the synchronized global growth that’s sent equities around the world to all-time highs.

“To the extent that trade is disrupted, it’s probably not good for economies, for U.S. companies and corporations, and would probably put pressure on the rising stock market,” Michael Cuggino, president and portfolio manager at the Permanent Portfolio Family of Funds in San Francisco, said by phone. “I don’t think it’s a surprise that you have negative news that might be impacting the continuing march-up as people take a pause.”

Elsewhere, the Brazilian real strengthened the most in eight months and the Ibovespa stock exchange rose to a record after a panel of judges upheld the conviction of former President Luiz Inacio Lula da Silva on graft, a ruling that would prevent him from running in the general election.

Terminal users can read more in our markets blog.

Here’s what to watch out for this week:

  • Earnings season is in full swing: Intel, LVMH Moet Hennessy Louis Vuitton, Starbucks and Hyundai Motor all come this week.
  • Barring any last minute changes in Washington, Trump will join world leaders and senior executives in Davos for the annual World Economic Forum.
  • The European Central Bank announces its rate decision on Thursday
  • The U.K. House of Lords is considering Prime Minister Theresa May’s Brexit bill this week.

These are the main moves in markets:

Stocks

  • The MSCI Asia Pacific Index increased 0.3 percent as of 6:18 a.m. Tokyo time.
  • ASX 200 futures declined 0.3 percent, the biggest drop in more than a week.
  • Nikkei 225 futures in Osaka fell 0.8 percent to the lowest in more than a week.
  • Futures on the S&P 500 Index rose less than 0.05 percent.

Currencies

  • The Bloomberg Dollar Spot Index sank 1 percent Wednesday to the lowest in more than three years on the biggest tumble in more than 10 months.
  • The Japanese yen was little changed at 109.13 per dollar early Thursday, after dropping 1 percent Wednesday, and is trading near its weakest since September.
  • The euro was unchanged at $1.2408, around strongest in more than three years.

Bonds

  • The yield on 10-year Treasuries rose three basis points Wednesday to 2.65 percent.
  • Germany’s 10-year yield climbed three basis points to 0.59 percent, near the highest since July.

Commodities

  • West Texas Intermediate crude surged 2.2 percent Wednesday to $65.88 a barrel, the highest in more than two years on the biggest jump in a month.
  • Gold increased less than 0.05 percent to $1,358.54 an ounce Thursday, hitting the highest in almost 18 months with its sixth consecutive advance.
  • LME copper surged 3.3 percent to $7,150.00 per metric ton, the biggest jump since October.

--With assistance from Luke Kawa Samuel Potter and Kailey Leinz

To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net, Cormac Mullen in Tokyo at cmullen9@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Christopher Anstey

©2018 Bloomberg L.P.

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