View Full Version : Asian Stocks Slip as Fed-Cut, Trade Optimism Fades: Markets Wrap

06-25-2019, 09:50 PM
Asian Stocks Slip as Fed-Cut, Trade Optimism Fades: Markets Wrap

(Bloomberg) -- Asian stocks were mostly lower on Wednesday following a sell-off on Wall Street as investor optimism cooled with regard to the Federal Reserve being on the brink of lowering interest rates and the U.S.-China trade talks getting back on track. Japanese shares slid and benchmarks dropped at the open in Shanghai and Hong Kong. Australia and South Korea saw more limited moves, while futures on the S&P 500 Index were little changed. American stocks dropped the most this month after Federal Reserve Chairman Jerome Powell warned the downside risks to the U.S. economy have increased, while not going beyond his previous guidance on rate cuts. A senior Trump administration official said the U.S. won’t accept further conditions on tariffs as part of reopening negotiations and no detailed trade deal is expected at the G-20 summit. Ten-year Treasury yields held around 2%, crude oil prices climbed on supply concerns, and gold gave up some recent gains.“My biggest concern here is that people think higher tariffs, or the threat of higher tariffs, can be offset by the promise of lower rates,” David Kelly, chief global strategist at JPMorgan Asset Management, told Bloomberg TV. “That’s not going to work.”Investor caution is returning ahead of the meeting between Presidents Donald Trump and Xi Jinping set for Saturday. The U.S. is willing to suspend the next round of tariffs on an additional $300 billion of Chinese imports while Beijing and Washington prepare to resume trade negotiations, people familiar with the plans said. Markets are betting the Fed will produce deep cuts to rates this year, and Tuesday’s drop on Wall Street underscored investor desire for confirmation on that score.Elsewhere, West Texas Intermediate oil rose after an industry report suggested U.S. crude stockpiles continue to shrink. Bitcoin extended its gains through $11,000.Here are some key events coming up:New Zealand decides on monetary policy Wednesday, with economists expecting no change to rates.The Group of 20 summit is in Osaka, Japan, on Friday and Saturday.These are the main moves in markets:StocksFutures on the S&P 500 Index were flat as of 10:33 a.m. in Tokyo. The underlying gauge fell 1% Tuesday.Japan’s Topix index fell 0.4%.South Korea’s Kospi was little changed. Australia’s S&P/ASX 200 Index lost 0.1%.Hang Seng fell 0.5%Shanghai Composite dropped 0.6%.CurrenciesThe yen was at 107.36 per dollar.The offshore yuan held at 6.8853 per dollar.The Bloomberg Dollar Spot Index was flat. The euro bought $1.1357.BondsThe yield on 10-year Treasuries edged up to 2%.CommoditiesWest Texas Intermediate crude rose 1.8% to $58.86 a barrel.Gold slid 0.7% to $1,413.46 an ounce.\--With assistance from Sarah Ponczek and Randall Jensen.To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.netTo contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.