Asian stock markets were mixed and the dollar strengthened as investors eased up after political uncertainty sent them toward haven assets. The Aussie erased losses after the central bank left its key interest rate on hold, while the kiwi rallied on inflation expectations.
The MSCI Asia Pacific Index was poised for its highest closing level since July 2015, even as Japanese stocks retreated. That comes after the S&P 500 Index retreated from near-record levels and 10-year Treasury yields slid to a two-week low. The dollar gained against most major currencies, with the yen was little changed after a three-day rally. The Aussie erased losses after the central bank left its key interest rate on hold, while the kiwi rallied on inflation expectations. Hong Kong equities fluctuated as investors awaited data on China’s foreign-currency reserves.
Investors stepped back after snapping up haven assets on Monday. A Trump-fueled rally in equities has been faltering as traders assess how the U.S. administration will balance protectionist trade rhetoric with promised tax cuts and spending increases. At the same time, they are assigning greater risk premiums to European countries where anti-establishment movements are gaining traction ahead of elections.What’s coming up in the markets:
- Central banks in India, New Zealand, Philippines and Thailand also have meetings on monetary policy this week.
- With a light calendar of U.S. economic data slated for the week, investors will keep an eye on political developments as the Trump administration takes swipes at the judicial branch for suspending its immigration order.
Here are the main market moves:
- The MSCI Asia Pacific Index rose less than 0.1 percent as of 3:22 p.m. in Tokyo, after closing Monday at the highest level since July 2015.
- The Topix index dropped 0.3 percent, following two days of gains. Toyota Motor Corp. dropped 2.3 percent to the lowest since November after reporting a 39 percent decline in third-quarter operating profit.
- Australia’s S&P/ASX 200 Index rose 0.1 percent, reversing an earlier loss of 0.6 percent. The Reserve Bank of Australia held interest rates unchanged as an upswing in global commodity prices eases the impact of slower economic growth.
- South Korea’s Kospi Index retreated 0.2 percent. New Zealand’s main benchmark was down 0.4 percent. Singapore’s Straits Times Index climbed 0.6 percent.
- Hong Kong’s Hang Seng index was little changed and the Shanghai Composite Index lost 0.3 percent ahead of data on foreign reserves.
- Futures on the S&P 500 were little changed after the benchmark gauge slid 0.2 percent on Monday.
- The Bloomberg Dollar Spot Index gained 0.2 percent, rising for a second day.
- The yen dropped less than 0.1 percent to 111.78 per dollar, after jumping 0.8 percent in the previous session.
- The Aussie rose 0.1 percent, erasing an earlier loss of 0.3 percent. It is up 6.3 percent this year for the best performance among major currencies.
- The New Zealand dollar advanced 0.6 percent, climbing for a fourth straight day, after inflation expectations jumped. Central bank governor Graeme Wheeler said he won’t seek a second term and will step down when his first ends in September.
- The euro dropped 0.5 percent to $1.0702 after sliding 0.3 percent on Monday.
- Oil climbed 0.3 percent to $53.14 a barrel, after falling 1.5 percent on Monday after Baker Hughes Inc. said U.S. drillers boosted rig count to the most since October 2015.
- Gold slipped 0.1 percent to $1,234.36 after advancing for three straight days to the highest level since November.
- Australian 10-year bonds rose, driving yields down seven basis points to 2.70 percent, while similar-dated New Zealand debt saw yields drop eight basis points to 3.31 percent.
- Yields on 10-year Treasuries lost two basis points to 2.39 percent after the biggest drop in more than two weeks in the previous session. The yield difference between French and German 10-year bonds jumped to 72 basis points on Monday.