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Asian Stocks Mixed as U.S. Treasury Yield Hits 3%: Markets Wrap

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  • S&P 500 eked out small gain on slim volume; tech stocks rose
  • Trade remains in focus as China, U.S. talk in Washington

Stocks in Asia opened mixed with 10-year Treasury yields hitting the 3 percent mark again as investors assessed the outlook for trade relations and tensions in the Middle East. The dollar held gains and crude oil nudged higher.

Equity benchmarks fluctuated in Japan, Australia and South Korea. Futures on Chinese stocks ticked higher as MSCI Inc. unveiled the list of 234 domestically listed companies that will be added to benchmark equity gauges from next month. The S&P 500 Index ended Monday with a small gain on below-average volume. Technology indexes remained higher, boosted by President Donald Trump’s easing of tensions in a trade spat with China. Treasury yields hovered around 3 percent and the dollar steadied after rising against a basket of major peers.

Investor focus returned to trade ahead of a meeting in Washington between U.S. and Chinese officials this week. While Trump’s move to get China’s beleaguered ZTE Corp. back on its feet provided a sign that he may be open to easing trade tensions, the messages from his administration appear to be mixed. Commerce Secretary Wilbur Ross said the U.S. is exploring alternatives to punish ZTE for breaking sanctions law separately from trade negotiations, a comment that later appeared to be contradicted by Trump.

Meanwhile, traders will get to take the pulse of the Chinese economy with a slew of data due on Tuesday. Output and consumption growth probably weren’t affected by trade tensions with the U.S. in April, while factory production may have picked up. Retail sales were probably steady and fixed-asset investment dropped off slightly.

Elsewhere, oil was back above $71 a barrel on reduced supply. The Argentine peso tumbled to a record low against the dollar as the central bank appeared willing to let it slide.

Terminal users can read more in our markets live blog.

These are some key events to watch this week:

  • The Reserve Bank of Australia releases minutes for its May policy meeting.
  • China plans to send Vice Premier Liu He to Washington for more trade talks.
  • European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the U.K.
  • China releases data including industrial production and retail sales figures Tuesday.
  • K. Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union.
  • S. retail sales, industrial production are due this week.
  • Vodafone Group, Home Depot, Credit Agricole, Tencent, Cisco Systems, Burberry Group, Walmart, Vivendi, AstraZeneca, Deere, Fujifilm, Noble Group, and Campbell Soup are among the companies releasing earnings this week.

These are the main moves in markets:

Stocks

  • The Topix index rose 0.1 percent as of 9:06 a.m. in Tokyo.
  • S&P/ASX 200 Index fell 0.1 percent.
  • Kospi index was little changed.
  • Hang Seng Index futures fell 0.1 percent.
  • S&P 500 futures fell less than 0.05 percent. The S&P 500 rose 0.1 percent.
  • The MSCI Asia Pacific Index fell 0.1 percent.

Currencies

  • The Bloomberg Dollar Spot Index was steady.
  • The yen fell 0.1 percent to 109.75 per dollar.
  • The euro was little changed at $1.1931.

Bonds

  • The yield on 10-year Treasuries was steady around 3 percent. It gained three basis points to 3.0024 percent on Monday.
  • Australia’s 10-year bond yield rose almost five basis points to 2.82 percent.

Commodities

  • West Texas Intermediate crude gained 0.1 percent to $71.03 a barrel.
  • Gold was steady at $1,313.93 an ounce.
  • LME copper fell 0.2 percent to $6,870 a metric ton.

From: https://www.bloomberg.com/news/articles/2018-05-14/msci-unveils-final-list-of-china-stocks-to-be-added-to-indexes

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