TOKYO( BLOOMBERG) Asian stocks and US futures dropped on Tuesday (Jan 22) as investors mulled the latest batch of headlines on global growth and trade, while Treasury yields edged lower.
Without any direction offered from American markets that were shut for a holiday on Monday, shares declined from Tokyo and Sydney to Shanghai and Seoul. News that the IMF (International Monetary Fund) was cutting its global growth forecast to the weakest in three years merely cemented an already downbeat mood. The offshore yuan was steady after President Xi Jinping stressed the need to maintain political stability in an unusual meeting that suggested fresh concerns about the implications of the slowing economy.
Investors find themselves caught between a stellar start to the year and increasingly hazy prospects for global growth and trade. Optimism on US-China talks has faded somewhat, after a Bloomberg report that the two sides are making little progress on the key issue of intellectual property protection.
"Signals from central bankers are going to be paramount," said Peter Rosenstreich, head of market strategy at Swissquote Bank, on Bloomberg Television. "If there's loose policy, investors won't worry" about slower growth, he said. As for economic data, "the ball is in the US court - a lot of the negativity has been priced into China".
Yet the US federal government shutdown means a dearth of data on that front.
Elsewhere, the pound was steady after UK Prime Minister Theresa May declined to rule out a delay to the March 29 Brexit departure date and the main opposition Labour party called for a vote that could pave the way to a second referendum. Oil was little changed near a two-month high in New York.
These are some events investors will be watching out for in the coming days:
Earnings season is in full swing: Johnson & Johnson, IBM, UBS, United Technologies, Texas Instruments, and Ford are among companies posting results this week.
The World Economic Forum, the annual gathering of global leaders in politics, business and culture, opens in Davos, Switzerland on Tuesday.
There are monetary-policy decisions for the Bank of Japan (Wednesday), the Bank of Korea and the European Central Bank (both Thursday).
And these are the main moves in markets:
Stocks
The MSCI Asia Pacific Index slipped 0.3 percent as of 10.57am in Tokyo
Japan's Topix Index fell 0.2 per cent.
S&P/ASX 200 fell 0.5 per cent.
Hang Seng Index dropped 0.4 per cent.
The Shanghai Composite Index fell 0.4 per cent.
Futures on the S&P 500 Index sank 0.6 per cent.
Currencies
The Bloomberg Dollar Spot Index climbed less than 0.05 per cent.
The euro climbed less than 0.05 per cent to US$1.1368.
The British pound was flat at US$1.2893.
The Japanese yen increased 0.1 per cent to 109.59 per dollar.
The offshore yuan was steady at 6.8032 per dollar.
Bonds
Ten-year Treasury yields dipped two basis points to 2.77 per cent.
Australian 10-year bond yields were flat at 2.32 per cent.
Commodities
West Texas Intermediate crude fell 0.1 percent to US$53.73 a barrel.
Gold rose 0.3 per cent to US$1,279.80 an ounce.
