In Asian Equity Markets indices traded mixed Monday morning as investors awaited a fresh round of U.S.-China trade negotiations set to begin later this week. Japan’s Nikkei 225 fell by 0.3% after starting the trading day higher. Shares of index heavyweight Fast Retailing, the company behind the Uniqlo chain of apparel stores, fell 0.54%. In Australia, the S&P/ASX 200 advanced 0.35% as the sectors mostly traded higher. Markets in Hong Kong and China are closed Monday for holidays.
In Currency Markets the yen gained slightly and the yuan fell a tad in early Asian trade on Monday on a media report that China wants the scope of this week’s trade talks and any deal with the United States to be narrow. Bloomberg reported that Chinese officials are signalling they are increasingly reluctant to agree to a broad trade deal pursued by U.S. President Donald Trump. That report knocked down the dollar against the yen during thin early Monday trade to as low as 106.55 yen. The U.S. currency has so far found some support around a one-month low of 106.48 touched last week.
In Commodities Markets oil prices fell on Monday, extending last week’s heavy losses, with traders fearing the global economic slowdown will weigh on future oil demand growth while pegging hopes for a rebound on progress in talks this week on ending the U.S.-China trade war. Brent crude futures edged down 24 cents to $58.13 a barrel while U.S. West Texas Intermediate (WTI) crude was at $52.69, down 12 cents. Both contracts ended last week with a 5% decline after dismal manufacturing data from the United States and China
In US Equity Markets indices gained on Friday after moderate jobs growth in September offered relief from a spate of dismal economic data this week that has rankled markets and fueled concerns that the world’s largest economy may be sliding into a recession. The S&P 500 jumped 1.42%, finishing at 2,952.01. The Nasdaq Composite added 1.4% to end at 7,982.47. During Friday’s session, HP Inc fell 9.6% after the computer maker said it would cut up to 16% of its workforce as part of a restructuring plan that would result in an overall charge of $1 billion.
In Bond Markets the two-year Treasury yield’s dramatic multi-day fall was capped on Friday after U.S. job growth increased moderately in September, leaving the yield up 1.4 basis points on the day, though still down 22.5 basis points for the week. The two-year yield is a proxy for investor expectations of moves in interest rate policy. Its move this week to its lowest level since September 2017 indicated a jump in forecasts that the Federal Reserve would cut rates later this month by 25 basis points from its current target rate of 1.75%-2.0%.