Asian stocks kicked off the week with declines following a weak US session on Friday. The pound slipped as UK Prime Minister Theresa May fought to keep her Brexit divorce plan alive.
Shares fell in Japan, Australia and South Korea. Futures trading from late Friday pointed to declines in Hong Kong. That’s after large-cap tech stocks dragged the Nasdaq 100 Index to a loss of more than 1.5%. Oil prices snapped a 10-day sell-off after the bear market for crude spurred Opec and its allies to start laying the groundwork to cut supply in 2019. Yields on 10-year treasuries, which don’t trade Monday thanks to a US holiday, ended just below 3.2% on Friday.
China’s economy will be in focus this week, with key monthly data due Wednesday. Chinese stocks tumbled last week amid mounting signs of a slowdown, seen in earnings outlooks and moves by regulators to sustain credit flows. While Alibaba Group Holding Ltd logged another record in its Singles’ Day online-sales extravaganza, that may not be enough to shift sentiment.
“Clearly there’s a deceleration due to the soft macro" picture for the economy, Junheng Li, founder of JL Warren Capital LLC in New York said in reference to Singles’ Day. “But where we can get some comfort from this number is that Chinese consumers are slowing, not collapsing."
Global stocks are facing pressure again, from China and worries that the most recent earnings season could prove to be a peak. There’s also a renewed debate on the direction of bond yields, with investors dialling down inflation expectations. US consumer prices due this week may offer further hints on the trajectory of costs.
Elsewhere, the offshore yuan held on to last week’s drop, with little sign of an end to the US-China trade war in the wake of the midterm elections.
These are the main moves in markets:
Japan’s Topix index declined 0.6% as of 9:05am in Tokyo. Hang Seng Index futures dropped 0.5%. Australia’s S&P/ASX 200 Index retreated 0.5%. South Korea’s Kospi index fell 0.8%. S&P 500 Index futures were little changed. The S&P 500 fell 0.9%.
The yen was flat at 113.86 per dollar. The offshore yuan was steady at 6.9488 per dollar. The Bloomberg Dollar Spot Index ticked higher. The euro declined 0.1% to $1.1321. The pound fell 0.3% to $1.2939.
The yield on 10-year treasuries declined about six basis points on Friday to 3.18%. Australia’s 10-year bond yield fell three basis points to 2.73 percent.
One basis point is one-hundredth of a percentage point.
West Texas Intermediate crude climbed 1% to $60.78 a barrel. It’s dropped about 20% from a 3 October peak. Gold was steady at $1,210.77 an ounce, after sinking 1.2% Friday to hit the weakest in a month.