Asian Stocks Set for Mixed Open; Aussie Jumps: Markets Wrap

(Bloomberg) -- Asian equities looked poised for a mixed start as U.S.-China trade tensions simmered with little in the way of weekend catalysts. The Australian dollar climbed after a surprise election victory for Prime Minister Scott Morrison.

Futures pointed lower in Tokyo, with a flat start seen in Hong Kong. Late Friday, the S&P 500 Index fell to round out a second straight weekly loss, while the dollar ended the week stronger. China’s offshore yuan remained near a five-month low. Crude gained after Saudi Arabia and other key producers in OPEC signaled their intention to keep oil supplies constrained for the rest of the year, while pledging to prevent any genuine shortages.

Markets remain fragile after the escalation in the trade war with China calling on the U.S. to negotiate on equal footing and Foreign Minister Wang Yi telling Secretary of State Mike Pompeo in a call that while it’s still possible to work out a deal, Beijing must safeguard its interests. A slew of U.S. data this week from home sales to manufacturing may offer some clues on the robustness of the economic expansion and Wednesday brings minutes from the Federal Reserve’s latest policy meeting.

Elsewhere, Bank of America predicted Indian stocks, currency and bonds will likely rise when markets open after exit polls showed Narendra Modi is poised to retain power. The Prime Minister’s Bharatiya Janata Party and its allies will win a majority of seats in parliament at the end of a grueling six-week election that was marred by violence, those exit polls showed. Market closures will affect Singapore, Thailand and Malaysia on Monday.

Here are some notable events coming up:

• Reserve Bank of Australia Governor Philip Lowe speaks in Brisbane on Tuesday. Later that day, Bank of England Governor Mark Carney testifies to Parliament about the May inflation report.
• The minutes of the FOMC’s April 30-May 1 policy meeting released Wednesday may reveal the level of consensus around Federal Reserve Chairman Jerome Powell’s assertion that officials didn’t see a strong case for moving interest rates in either direction.
• Counting of votes from the Indian general elections takes place Thursday as Prime Minister Narendra Modi attempts to secure a second term. Most commentators predict the government will be returned, though with a reduced number of seats.
• On Thursday, an account of the April meeting of the European Central Bank could reveal more about the discussion that saw the review of negative rates inserted into President Mario Draghi’s opening statement.

And these are the main moves in markets:

Stocks

• Futures on Japan’s Nikkei 225 slid 0.2% late Friday.
• Hang Seng Index futures advanced 0.1%.
• The S&P 500 Index fell 0.6% Friday.

Currencies

• The yen held at 110.10 per dollar.
• The offshore yuan was little changed at 6.9473 per dollar.
• The Bloomberg Dollar Spot Index ended last week up 0.8% and held onto gains early Monday.
• The euro rose 0.1% to $1.1164.
• The British pound added 0.1% to $1.2732.
• The Aussie was up 0.4% at 68.98 U.S. cents.

Bonds

• The yield on 10-year Treasuries ended last week at 2.39%.

Commodities

• West Texas Intermediate crude rose 1% to $63.41 a barrel.
• Gold rose 0.1% to $1,278.53 an ounce.

--With assistance from Susanne Barton and Sophie Caronello.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Andreea Papuc

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.