U.S. Futures Drop on Trade Doubts; Pound Slides: Markets Wrap


(Bloomberg) — U.S. futures extended declines and most Asian stocks outside Japan fell in thin trading Tuesday as investors await news on any schedule for trade talks. The pound hit the lowest level since 2017 amid deepening U.K. political tensions.

Shares saw modest gains in Tokyo and slipped in Hong Kong, Sydney and Shanghai. European futures were little changed. Bloomberg reported on difficulties the U.S. and China are having in arranging trade talks, following Washington’s rejection of Beijing’s request to delay tariffs that took effect over the weekend. A dollar gauge extended gains to the highest in more than two years as Treasury yields ticked higher.

September is off to a rocky start as markets remain sensitive to the twists and turns on trade with the chances of a resolution between the world’s two-biggest economies appearing more out of reach. Damage from the uncertainty is now being reflected in economic data: a slide in China’s official purchasing managers’ index highlighted pressures facing the world’s second-largest economy from escalating tensions. Violent confrontations in Hong Kong are also weighing on sentiment.

In the U.K., the pound fell below $1.20 for the first time since January 2017 as Parliament looked set to seek a vote that would delay Brexit by three months unless there’s a new accord with the European Union by mid-October. Prime Minister Boris Johnson responded that he would not delay under any circumstances and has threatened a snap election if he loses a vote in Parliament.

The Australian dollar pared losses after the Reserve Bank of Australia left interest rates unchanged. Elsewhere, crude oil slipped below $55 a barrel amid concerns a hurricane battering the U.S. East Coast and an economic slowdown from the trade war may dent demand.

Here are some key events coming up:

Fed speakers include New York Fed’s John Williams on Wednesday and Fed chair Jerome Powell on Friday.The U.S. jobs report on Friday is projected to show nonfarm payrolls rose by 158,000 in August, slightly above the month prior. Estimates are for unemployment to be steady at 3.7% and the average hourly earnings rate of increase to slow to 3.0%.

These are the main moves in markets:


Japan’s Topix index rose 0.4% at the 3 p.m. in Tokyo.Australia’s S&P/ASX 200 Index fell 0.2%.South Korea’s Kospi index lost 0.3%.Hong Kong’s Hang Seng Index slid 0.4%.Futures on the S&P 500 Index declined 0.7%.MSCI Asia Pacific Index fell 0.3%.Euro Stoxx 50 futures were little changed.


The yen was flat at 106.25 per dollar.The offshore yuan ticked 0.1% up to 7.1842 per dollar.Bloomberg Dollar Spot Index rose 0.1%.The British pound lost 0.4% to $1.2013.


Ten-year Treasury yields rose two basis points to 1.52%.Australia’s 10-year bond rose one basis point to 0.94%.


West Texas Intermediate crude dipped 0.4% to $54.89 a barrel.Gold slipped 0.2% to $1,526.95 an ounce.

–With assistance from April Ma.

To contact the reporter on this story: Andreea Papuc in Sydney at apapuc1@bloomberg.net

To contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.net

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2019-09-03 06:11:15

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