In Asian Equity Markets most indices headed lower on Wednesday as investors awaited the signing of an initial US-China trade deal, with sentiment somewhat dented by comments from the US Treasury Secretary that tariffs would remain in place for now. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.13 per cent, Japan’s benchmark Nikkei and South Korea’s Kospi shed 0.29 per cent and 0.48 per cent, respectively, while Australian stocks added 0.33 per cent.
In Currency Markets the safe-haven yen held firm and riskier Asian currencies softened a little on Wednesday, as currency investors awaited the signing of the U.S.-China trade deal with trepidation. The formal agreement is aimed at drawing a line underneath 18 months of tit-for-tat tariff hikes that have hurt global growth. The yen was nearly 0.1% firmer at 109.91. The euro was steady at $1.1129 and the Swiss franc held on to overnight gains to sit at 0.9672 per dollar.
In Commodities Markets oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world’s biggest crude users, may not lead to more fuel demand as the U.S. intends to keep tariffs on Chinese goods in place. Brent crude was down 21 cents, or 0.3%, at $64.28 per barrel. U.S. West Texas Intermediate crude futures were down 23 cents, or 0.4%, at $58.00 a barrel. U.S. crude inventories rose by 1.1 million barrels, data from the API showed, countering expectations for a draw.
In US Equity Markets stocks hit intra-day record highs on Tuesday before turning negative following a report that the United States would likely maintain tariffs on Chinese goods until after November’s presidential election. Wells Fargo & Co fell 4.9% after reporting a slump in profit as it set aside $1.5 billion for legal expenses. Citigroup Inc rose 2.1% as it topped Wall Street profit estimates. Delta Air Lines Inc rose 3.3% after better-than-expected quarterly profit, boosted by customers gained from rival airlines’ 737 MAX cancellations.
In Bond Markets U.S. Treasury yields ticked down on Tuesday as investors took stock of a moderate rise in consumer prices and the expected signing of a trade deal between the United States and China. The benchmark 10-year yield was down 2.7 basis points in afternoon trading to 1.8214%, after beginning the session little changed. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down less than a basis point at 1.5781% in afternoon trading.