Stocks Mixed After Rally; Treasuries, Yuan Steady: Markets Wrap

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Asian stocks opened mixed Wednesday after U.S. equities halted a five-day winning streak and Treasuries steadied amid signs of fatigue from the recent global revival in risk appetite.

Japanese shares edged lower, while they nudged up in Australia and Korea. The S&P 500 Index ended little changed and futures were steady. MSCI’s global index of shares has risen the past seven days. U.S. President Donald Trump said he’s personally holding up a trade deal with China and that he won’t complete the agreement unless Beijing returns to terms negotiated earlier in the year. The dollar drifted and crude oil declined.

Market sentiment remains fragile ahead of the Group-of-20 summit, which some say could provide a breakthrough in stalled trade talks between the world’s two-largest economies. As traders have added bets on lower U.S. interest rates, Trump stepped up his criticism of Fed policy in tweets Tuesday, calling borrowing costs “way too high” amid “VERY LOW INFLATION.” Next up Wednesday comes data on China factory and consumer prices.

“Trade overwhelmingly is still something of a headwind because of the uncertainty, but monetary policy is starting to backfill a little bit and provide a little bit of downside support,” Gina Martin Adams, chief equity strategist at Bloomberg Intelligence, told Bloomberg TV. “No one really knows how to price trade because we don’t know where things are headed.”

Elsewhere, oil fell back below $53 a barrel in New York after an industry report showed U.S. oil inventories swelling further.

Here are some key events coming up:

  • The U.S. releases consumer prices for May on Wednesday.
  • ECB President Mario Draghi speaks at a conference in Frankfurt on Wednesday.
  • 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 slid 0.3% as of 9:03 a.m. in Tokyo.
  • South Korea’s Kospi index rose 0.2%.
  • Hang Seng Index futures earlier dropped 0.3%.
  • Australia’s S&P/ASX 200 Index rose 0.3%.
  • Futures on the S&P 500 Index were flat. The underlying gauge was flat Tuesday.

Currencies

  • The yen was at 108.49 per dollar.
  • The offshore yuan held at 6.9258 per dollar.
  • The Bloomberg Dollar Spot Index was flat.
  • The euro traded at $1.1328, little changed.

Bonds

  • The yield on 10-year Treasuries held at 2.14%.
  • Australia’s 10-year bond yield remained at 1.45%.

Commodities

  • West Texas Intermediate crude dipped 1.1% to $52.68 a barrel.
  • Gold held at $1,327.69 an ounce.

— With assistance by David Wilson, Sarah Ponczek, and Vildana Hajric

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