Stocks in Asia traded mixed Monday as doubts on the possibility for progress ahead of a potentially pivotal week for U.S.-China trade talks crept back into markets.
Resurgent worries on global growth are driving bonds higher and threatening to dent this year’s rally in riskier assets, with stocks dipping last week. Equities rallied in China where exchanges reopened after a one-week holiday, and edged higher in Hong Kong. Shares in Sydney ticked lower along with those in South Korea. Japan is shut for a holiday, so Treasuries won’t trade until the London open after 10-year yields edged down to 2.63 percent last week.
The U.S. and China may struggle to reach a deal before the March 1 deadline for higher tariffs, while warnings mount that the dispute is curbing the global economic expansion and denting corporate profits. Chinese Vice Premier Liu He will join Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer in Beijing for high-level trade talks this week. In Washington, the U.S. government could be headed for another shutdown as political tensions flare between Congress and the president.
“We still have concerns about global growth and that centers on those U.S.-China negotiations,” Kerry Craig, global market strategist at JPMorgan Asset Management, told Bloomberg TV from Melbourne. “We’re unlikely to see any massive moves this week saying we’re going to get a deal on that.”
Elsewhere, iron ore is being rocked by the crisis at Brazil’s Vale SA, with prices surging to the highest in years on concern over a supply crunch. The New Zealand dollar edged up from a two-week low, while crude held below $53 a barrel.
Here are some key events coming up:
- Earnings season continues with reports from companies including Vivendi, Nvidia, Cisco, Nestle, Coca-Cola, Credit Suisse, Michelin and Nissan.
- Sweden’s Riksbank is expected to keep interest rates at minus 0.25 percent on Wednesday after the first increase in more than seven years in December.
- Data Wednesday is expected to show U.S. consumer prices rose 0.1 percent in January, after falling 0.1 percent in December.
- If no deal is reached on the U.S-Mexico border wall, parts of the federal U.S. government may shut down again later this week when stopgap government funding expires.
These are the main moves in markets:
- The MSCI Asia Pacific ex Japan Index was little changed as of 11:11 a.m. in Hong Kong.
- Hong Kong’s Hang Seng Index gained 0.3 percent.
- Shanghai Composite Index climbed 0.9 percent.
- Australia’s S&P/ASX 200 Index slid 0.4 percent.
- Futures on the S&P 500 Index slipped 0.1 percent. The underlying gauge rose 0.1 percent Friday.
- The yen slid 0.2 percent to 109.92 per dollar.
- The offshore yuan added 0.2 percent to 6.7732 per dollar.
- The euro was flat at $1.1321.
- The British pound bought $1.2938.
- Australia’s 10-year bond yield held at 2.10 percent.
- The yield on 10-year Treasuries declined two basis points to 2.6375 percent Friday.
- West Texas Intermediate crude slid 1.2 percent $52.01 a barrel.
- Gold lost 0.2 percent to $1,313.91 an ounce.
— With assistance by Sarah Ponczek