Sydney - Asian stocks fell while gold and the yen were steady after three days of gains as investors grew cautious before speeches this week from Donald Trump and Janet Yellen.
Banks and exporters dragged equities lower in Tokyo, as the Japanese currency and gold remained near the highest levels in three months. Treasury yields rose after falling last week by the most since July. Oil extended gains above $54 a barrel and iron ore rallied after last week’s declines. The British pound dropped against all its major peers on a report of a possible Scottish independence referendum in March.
The rally in global equities that helped push their value above $70trn is losing momentum as money managers grapple with political uncertainty and the Federal Reserve’s schedule for lifting borrowing costs.
Investors will be hoping for details on Trump’s spending plans as lingering concern about the timing of US fiscal stimulus weighed on the dollar this year, testing its post-election surge. Markets from stocks to currencies have been subject to daily fluctuations as investors hang on each word from central bank officials and politicians.
“We are not sure what Trump’s policies are going to be and whether he’s going to implement them at all,” Kumar Palghat, a portfolio manager at Kapstream Capital, told Bloomberg TV in Sydney Monday. We should get some detail from Trump’s speech Tuesday, he said.
What’s ahead for this week:
In Trump’s address before a joint session of Congress on February 28, the president is expected to lay out his plans for tax and health-care reform and infrastructure spending. Investors will also be watching comments from Fed officials, including Yellen, who speaks at an event in Chicago at the end of the week.
This week’s economic data include US personal income and spending. India and Australia will report on fourth-quarter GDP.
China’s PMI data are expected to show continued expansion. Japan reports on factory output, housing starts and capital spending. Macau’s gambling rebound probably accelerated this month, driven by Chinese high rollers. Numbers are due Wednesday.
Here are the main moves in markets:
Stocks
The MSCI Asia Pacific Index slipped 0.5% at 08:30, erasing last week’s 0.5% gain. Japan’s Topix dropped 1%, retreating for a third day. Hong Kong’s Hang Seng lost 0.4%, failing to hold a gain above 24 000, and the Shanghai Composite Index lost 0.7%.
China’s economy remained generally steady during the Lunar New Year while sentiment readings show uncertainties over the outlook, according to the earliest private data for February.
South Korea’s Kospi and Singapore’s Straits Times Index each slumped 0.4%. Futures on the S&P 500 added less than 0.1%. The Dow Jones Industrial Average closed at another record on Friday, gaining for an 11th day. The Stoxx Europe 600 Index ended flat last week after falling for three straight sessions.
Currencies
The yen was little changed at ¥112.13/$, after swinging between gains and losses of 0.2%. The currency jumped 1.4% over the previous three days.
The Bloomberg Dollar Spot Index was also little changed. The gauge fell 0.4% last week, its first drop in three weeks. The British pound lost 0.3% after the Times of London reported that UK Prime Minister Theresa May is preparing for Scotland to potentially call for an independence referendum in March. The currency tumbled 0.8% on Friday.
Commodities
WTO crude futures rose 0.6% to $54.30 a barrel after falling 0.8% on Friday. Gold slipped less than 0.1% to $1 256.79 an ounce. The metal jumped 1.8% last week for its fourth straight weekly advanced. Iron ore jumped 3.6% after retreating last week.
Bonds
Yields on 10-year Treasuries added two basis point to 2.33%, rising after three straight days of declines. Australia’s 10-year yields slipped two basis points to 2.71%.
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