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Asia Stocks Set for Modest Gains; Dollar Rises: Markets Wrap

Cormac Mullen

(Bloomberg) -- Asian stocks looked set for modest gains after U.S. stocks advanced as investors weighed the latest turns in the trade war between the world’s two largest economies. The dollar rose and Treasuries edged higher.

Futures pointed higher in Japan and were little changed in Australia. The S&P 500 on Monday capped a third month of gains out of the last four, rebounding from the August slide. Technologya fueled Monday’s rise after the Trump administration partially refuted a report it would target Chinese capital, reversing losses sparked by the news Friday. Ten-year Treasuries erased an early drop to trade higher, after data showed weakening business activity.

“Investors continue to be people who are pulling petals off a daisy saying ‘there will be an accord, there won’t be an accord, there will be an accord, there won’t be.’ Nobody really knows for sure -- at least I don’t,” Sam Stovall, chief investment strategist at CFRA, said about trade between the U.S. and China in a phone interview. “Based on the market’s lack of fear, the majority expect some sort of discussion to occur October 10th and that there will be encouraging developments as we move forward.”

Asian trading may be subdued by holidays in Hong Kong and China Tuesday.

The pound was under pressure as Prime Minister Boris Johnson fought off allegations of sexual impropriety and plots in Parliament to oust him over his Brexit plans. West Texas crude held losses to trade below $55 a barrel.

Here are some key events coming up this week:

Australia’s monetary policy decision is set for Tuesday, with markets and economists leaning toward a third interest-rate cut for 2019.Euro-zone CPI for September is scheduled for Tuesday.There’s a slew of U.S. data including ISM manufacturing on Tuesday, the ADP employment report on Wednesday and the monthly jobs report on Friday.The Reserve Bank of India sets policy on Friday.

Here are the main moves in markets:

Stocks

Nikkei 225 futures rose 0.5%.S&P/ASX 200 futures rose 0.1%.The S&P 500 Index rose 0.5%.The Nasdaq Composite Index gained 0.8%.The Stoxx Europe 600 Index increased 0.4%.

Currencies

The Bloomberg Dollar Spot Index increased 0.2% Monday.The British pound was little changed at $1.2289.The euro declined 0.4% to $1.0899.The Japanese yen dropped about 0.2% to 108.08 per dollar.

Bonds

The yield on 10-year Treasuries fell two basis points to 1.66%.

Commodities

West Texas Intermediate crude sank 2.9% to $54.27 a barrel.Gold decreased 1.7% to $1,472.39 an ounce Monday.

--With assistance from Randall Jensen and Vildana Hajric.

To contact the reporter on this story: Cormac Mullen in Tokyo at cmullen9@bloomberg.net

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

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