The dollar headed lower and Asian stocks declined as traders digested the tensions sparked by Donald Trump’s order halting some immigration, a move that’s ignited opposition from world leaders. Bonds rose with gold.
The greenback weakened against all its major peers, trading near the lowest levels in two months. Stocks in Japan and Australia dropped with S&P 500 index futures, while markets in Hong Kong, China, Malaysia, Korea, Singapore, Taiwan and Vietnam are among those closed for holidays. Australian 10-year bonds climbed with gold. Oil dropped for a second day.
Trump’s executive order halting immigration from seven predominantly Muslim nations drew criticism from world governments and some of the largest companies, bringing the geopolitical and international trade risks surrounding the new U.S. president into sharper focus. His order was curbed by a Boston federal judge, who directed customs officials at the city’s Logan International Airport to allow passengers from those countries with valid visas to deplane there and go on their way.
“The main focus over the weekend has been Trump’s immigration policy and it won’t necessarily surprise to see some heat coming out of the dollar in early trading,” said Chris Weston, Melbourne-based chief market strategist at IG Ltd. “Whether the markets start to price in a stronger Trump risk premium is yet to be seen.”
Here’s what’s coming up this week:
- Apple Inc., Facebook Inc. and Amazon.com Inc. are among the major U.S. companies due to report results. Of the 219 S&P 500 names to report so far, 73 percent have topped profit estimates. Japan will see earnings from heavy hitters including Sony Corp. and Honda Motor Co.
- The first U.S. jobs report of the year is due on Feb. 3., while China manufacturing and services industry data are scheduled for Feb. 1.
- The Federal Reserve holds a policy meeting on Feb. 1 and the Bank of Japan convenes. Neither is expected to change lending rates, though the Fed’s statement will be parsed for any reading on Trump’s impact on the world’s largest economy.
- The Bloomberg Dollar Spot Index dropped 0.3 percent. The yen gained 0.6 percent to 114.36 per dollar as of 12:35 p.m. in Tokyo. The Swiss franc climbed 0.3 percent to 0.9966 per dollar.
- The kiwi strengthened 0.1 percent to 72.69 U.S. cents.
- Australia’s S&P/ASX 200 Index lost 1 percent, dragged down by technology shares.
- Japan’s Topix index slid 0.7 percent, led by a drop in banks and exporters. The gauge advanced 1 percent last week, trading near the highest since December 2015.
- S&P 500 futures dropped 0.3 percent after the underlying gauge gained 1 percent last week.
- The yield on 10-year Australian government bonds slid 5 basis points to 2.73 percent. U.S. Treasury 10-year yields fell 2 basis point to 2.47 percent.
- Gold rose 0.3 percent to $1,194.62.
- Oil futures dropped 0.4 percent to $52.98 a barrel amid speculation increases in U.S. drilling will boost output and curtail the effects of supply cuts made by OPEC and other producers.