Asia Stocks Look to Gains; Dollar Strengthens: Markets Wrap

Stocks in Japan and Australia looked set to recoup some of yesterday’s declines as investors continue to weigh the impact of potential global trade restrictions on economic growth. The dollar rose and emerging markets remained under pressure.

With futures signaling gains for shares in Tokyo and Sydney, Hong Kong returns after Monday’s holiday when pronounced moves lower were seen across Asian equity markets. In the U.S., the S&P 500 Index recovered its early losses to end the day higher as technology shares climbed. Treasuries slipped while commodities had their biggest tumble since 2016, led by weakness in precious metals.

With U.S. trading desks thinly staffed ahead of the July 4 holiday, volume in American stocks was about 20 percent below average. An expansion in U.S. manufacturing gave some comfort to concern borne out of reports in Japan, China and South Korea over the past few days that added to worries about global economic growth. The Trump administration’s planned imposition of tariffs against China will start on Friday.

Elsewhere, crude declined after U.S. President Donald Trump put pressure on Saudi Arabia to ramp up oil output, with traders worrying about how it could affect spare capacity ahead.

These are key events coming up this week:

• The Reserve Bank of Australia has its policy decision Tuesday.
• The U.S. celebrates Independence Day on Wednesday, July 4. Stock and bond markets are closed, along with government offices.
• Federal Reserve releases minutes of its June 12-13 meeting, when FOMC policy makers raised the benchmark rate a quarter point for the second time this year and lifted the median forecast to four total increases in 2018.
• U.S. payrolls are due Friday.
• Also on Friday, the U.S. is scheduled to impose tariffs on $34 billion of Chinese goods. Beijing has said it will slap tariffs on an equal value on U.S. exports including agricultural and auto exports.

Here are the main market moves:

Stocks

• Futures on Japan’s Nikkei 225 Stock Average rose 0.6 percent in Singapore trading.
• Futures on Australia’s S&P/ASX 200 Index added 0.3 percent.
• The S&P 500 gained 0.3 percent.
• The MSCI Emerging Market Index fell 1 percent.

Currencies

• The Bloomberg Dollar Spot Index rose 0.5 percent.
• The euro held at $1.1638.
• The pound bought $1.3144.
• The Aussie traded at 73.39 U.S. cents.

Bonds

• The yield on 10-year Treasuries added one basis point to 2.87 percent.

Commodities

• The Bloomberg Commodity Index declined 1.9 percent on Monday, the largest fall since November 2016.
• West Texas Intermediate crude fell 0.1 percent to $74.06 a barrel.
• Gold was little changed at $1,241.80 an ounce.

— With assistance by Sarah Ponczek