Asia Stocks See Modest Gain; Yen Slips Before BOJ: Markets Wrap

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Asian stocks edged higher Tuesday as investors awaited news from the resumption of U.S.-China trade talks. The yen ticked lower ahead of a rate decision from the Bank of Japan.

Shares saw modest gains in Japan, South Korea and Australia, which could see a record close if the advance holds. Hong Kong futures were flat amid escalating protests in the city, with China warning that unrest had gone “far beyond” peaceful protest. Earlier, the S&P 500 Index fell for the second time in three sessions after reaching a record Friday as Amazon Inc., Facebook Inc., Alphabet Inc. and Netflix Inc. all slid. Treasury yields were little changed and the dollar held near its highest in almost two months..

Investors are likely to opt for the sidelines as they await developments on trade with Chinese and American negotiators gathering for two days of talks Tuesday, three months after negotiations broke down. Fed Chair Jerome Powell’s post-meeting press conference Wednesday will provide an chance to gauge the trajectory of U.S. rates after the central bank is anticipated to ease policy. In Asia, the Bank of Japan meets Tuesday and is widely expected to sit tight as it assesses the effect of the Fed’s decision.

Meanwhile, as corporate reporting seasons roll on in the U.S., Japan and Australia, traders will be looking for any impact from the protracted trade dispute. Japan’s factory output fell more than expected in June as the trade tensions and a slowdown in the global economy dragged exports lower for a seventh straight month.

Elsewhere, the pound steadied after sliding to its lowest in more than two years as U.K. Prime Minister Boris Johnson stepped up preparations for a no-deal Brexit. Oil extended gains on speculation that demand will get a bump from the potential U.S. Federal Reserve rate cut.

Here are some of the key events to watch as the week unfolds:

  • Earnings include: Nintendo, Qualcomm, AMD, Siemens, Sony, Credit Suisse, Nomura, Toyota, Honda, Ferrari, GM, BMW, Rio Tinto, ConocoPhillips, BP, Shell, Vale, Heineken, GE, Altria.
  • Bank of Japan rate decision and Governor Haruhiko Kuroda briefing are due Tuesday.
  • U.S. Trade Representative Robert Lighthizer and his team meet their Chinese counterparts in Shanghai Tuesday.
  • Fed officials begin their two-day meeting on monetary policy in Washington Tuesday. Chairman Jerome Powell will hold a press conference following the FOMC’s decision Wednesday.
  • The Bank of England policy decision is due Thursday.
  • The U.S. July jobs report is due Friday.

These are the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1%. The S&P 500 Index fell 0.2% Monday.
  • Japan’s Topix Index rose 0.5%.
  • Korea’s Kospi Index gained 0.4%.
  • Australia’s S&P/ASX 200 Index gained 0.4%.

Currencies

  • The yen fell 0.1% to 108.93 per dollar.
  • The offshore yuan was little changed at 6.8942 per dollar.
  • Bloomberg Dollar Spot Index was little changed.
  • The euro was steady at $1.1141.
  • The British pound was at $1.2211 after dropping 1.3%, its biggest slide in more than eight months.

Bonds

  • The yield on 10-year Treasuries held around 2.06%.
  • Australian 10-year yields were at 1.20%.

Commodities

  • West Texas Intermediate crude gained 0.6% to $57.20 a barrel.
  • Gold fell 0.2% to $1,424 an ounce.

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