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(Sep 8): Asian stocks looked set for modest gains on Tuesday after European stocks rose, showing resistance to the technology-driven downdraft in the US.
Futures were highest in Japan, Australia and Hong Kong. Europe’s Stoxx 600 rose on Monday with broad gains led by automakers, while contracts in the S&P 500 index pointed higher. Oil extended its decline below $ 40 a barrel as a price cut by Saudi Arabia indicated that fuel consumption is faltering in key markets. The dollar won. Chinese assets will be in focus after President Donald Trump said he intends to curb America’s economic relationship with the country.
Investors returning on Tuesday from the US Labor Day holiday will see a rally that is fading as doubts about extreme positioning and valuations mount. US tech stocks, which have posted stratospheric gains through the depths of the pandemic, showed signs of releasing late last week amid reports that big option bets were fueling their gains.
“I don’t think this is the beginning of a fall in asset prices,” said Robert Greil, chief strategist at Merck Finck Privatbankiers AG in Munich. “We are only in the first phase of economic recovery, which makes a major recession unlikely. Of course, setbacks are buying opportunities in such an environment. “
Meanwhile, President Trump has contrasted with Joe Biden by threatening to punish American companies that create jobs abroad and banning those doing business in China from obtaining federal contracts.
Elsewhere, the pound extended its decline to the longest since June, as prospects for a trade deal with the European Union looked increasingly remote. UK Prime Minister Boris Johnson said on Monday that he is willing to walk away from the talks rather than commit to what he sees as the basic principles of Brexit, and has set an October 15 deadline for reaching a deal.
Here are some key events to come:
The ECB will likely hold rates on Thursday, but indicates that downside risks have intensified, suggesting further relaxation is possible before the end of the year.
US CPI data is due on Friday, and consumer prices are expected to rise in August for the third consecutive month.
These are the main movements in the markets:
Stocks
S&P 500 Index futures were up 0.6% from Friday’s closing level.
Nikkei 225 futures were up 0.5% earlier.
Australian S & P / ASX 200 index futures rose 0.4%.
Hong Kong’s Hang Seng Index futures rose 0.5% earlier.
The Stoxx Europe 600 Index was up 1.7%.
Coins
The yen changed little to 106.29 per dollar.
The Bloomberg Dollar Spot Index increased 0.3%.
The euro was at $ 1.1813.
The British pound was trading at $ 1.3170 after falling 0.9%.
Captivity
Germany’s 10-year yield added 1.1 basis points to -0.464%.
Raw Materials
West Texas Intermediate crude fell 1.8% to $ 39.07 a barrel.
Gold was US $ 1,933.64 an ounce.
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