6/3/2018/Bloomberg Quint
by Adam Haigh
Asian equities declined with U.S. stock futures following the resignation of globalist White House economic adviser Gary Cohn. The yen and Treasuries climbed as trade-war concerns intensified.
Stock indexes in Asia tumbled, then recovered for a time before moving lower again as investors mulled the implications of stronger influence for protectionists in the Trump administration. S&P 500 Index futures dropped over 1 percent. The yen and euro strengthened against the greenback and bond yields fell. The won rallied after North Korea indicated — according to South Korea — that it was open to giving up its nuclear weapons.
“With Gary Cohn’s resignation, it shows that within the Trump administration the pendulum is swinging toward anti-trade,” said James Cheo, an investment strategist at Bank of Singapore. “What we should be watching out for is how other countries react in response to the tariffs,” he said, advising holding off on any buying “on this dip.”
Shortly after the Cohn announcement, news emerged that the White House is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports. That comes as the administration prepares to impose steep tariffs on steel and aluminum, which Cohn had opposed.
The prospect of increased protectionism overshadowed developments on North Korea that had underpinned gains in U.S. markets. Trump signaled that he’s open to talks with North Korea after Kim Jong Un’s regime told South Korean envoys that he’s willing to consider denuclearization.
Elsewhere, oil extended a decline as industry data is expected to show that U.S. stockpiles expanded. Gold edged lower.
Terminal users can read more in our markets blog.
Here are some key events coming up this week:
- The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.
- The ECB isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing.
- BOJ monetary policy decision and briefing on Friday.
- U.S. monthly payrolls data come Friday.
These are the main moves in markets:
Stocks
- The MSCI Asia Pacific Index fell 0.6 percent as of 4:33 p.m. Tokyo time.
- Topix index fell 0.7 percent.
- Hong Kong’s Hang Seng Index fell 1 percent.
- Kospi index fell 0.4 percent.
- Australia’s S&P/ASX 200 Index dipped 1 percent.
- Futures on the S&P 500 Index fell 1.1 percent.
Currencies
- The Bloomberg Dollar Spot Index fell less than 0.05 percent.
- The Japanese yen rose 0.4 percent to 105.68 per dollar.
- The euro rose 0.1 percent to $1.2417.
Bonds
- The yield on 10-year Treasuries fell three basis points to 2.86 percent.
- Japan’s 10-year yield fell one basis point to 0.05 percent.
- Australia’s 10-year yield fell three basis points to 2.79 percent.
Commodities
- West Texas Intermediate crude fell 0.8 percent to $62.09 a barrel.
- Gold fell 0.1 percent to $1,333.29 an ounce.
- LME copper fell 0.4 percent to $6,972.50 per metric ton.