Asia Stocks Mixed While Dollar Weakens Before Fed

EghtesadOnline: Asian equities were mixed ahead of the U.S. Federal Reserve’s policy decision and as investors sifted through earnings from companies including Alphabet Inc. Oil rose while the dollar resumed declines.

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25 July 2017

The MSCI Asia Pacific Index fluctuated near a 10-year high as stocks in Australia advanced while Japanese shares retreated. The Bloomberg Dollar Spot Index approached the lowest level since May 2016 as the euro and yen strengthened. Oil extended gains above $46 a barrel after Saudi Arabia promised deep cuts to crude exports next month to help ease a global glut, Bloomberg reported.

Earnings season is ramping up ahead of the eagerly anticipated Fed policy decision on Wednesday. Data Monday in Europe cast doubt over the strength of the recovery and bond investors are reacting to a weak inflation outlook in the U.S. While the Fed is expected to keep rates on hold, traders are looking for comments that it could make on its balance-sheet reduction plan.

Political turmoil in Washington remains front and center after senior adviser Jared Kushner said he had no improper contacts with Russian officials during the presidential campaign. Donald Trump’s son and former Trump campaign Chairman Paul Manafort will go before Senate committees on Wednesday.

Here are some key events coming up this week:

The U.K. holds post-Brexit trade talks with the U.S. in Washington.

China posts industrial profits for last month, with early indicators pointing upward.

Japanese June data also due this week may show sluggish CPI, even amid a tightening labor market and increased household spending.

Fed policy makers begin their meeting on Tuesday, with a decision due on Wednesday.

The U.S. economy probably gained traction in the second quarter as spending by American consumers picked up after a lull early this year. The gross domestic product report follows the two-day Fed policy meeting.

Results from Facebook Inc., Deutsche Bank AG, Nomura Holdings Inc., BNP Paribas SA and UBS Group AG are among those expected this week.

Here are the main moves in markets:

Currencies

The yen advanced 0.1 percent to 111.03 per dollar as of 1:56 p.m. in Tokyo, after dropping as much as 0.2 percent earlier in the day. The currency is heading for a sixth straight day of gains.

The euro rose 0.2 percent to $1.1660, after dropping 0.2 percent on Monday. The currency is trading near the highest level since January 2015.

The Bloomberg Dollar Spot Index was down less than 0.1 percent.

The Australia dollar rose 0.2 percent, after erasing an earlier decline. Attention turns to two key events on Wednesday: June quarterly inflation data and a speech on the labor market and monetary policy from Reserve Bank of Australia Governor Philip Lowe.

Stocks

Japan’s Topix index lost 0.2 percent. Australia’s S&P/ASX 200 Index added 0.9 percent with volume down about 13 percent from a 30-day average. South Korea’s Kospi index fell 0.1 percent.

The Hang Seng Index was little changed while the Shanghai Composite Index slipped 0.1 percent.

Futures on the S&P 500 Index were flat after the underlying gauge slipped 0.1 percent. Nasdaq 100 Index futures slipped after Alphabet Inc. fell in after-hours trading as sales at Google’s parent fell short of the most-optimistic estimates.

Commodities

WTI crude gained 0.6 percent to $46.60. It rose 1.3 percent Monday after Saudi Arabia said it would cap shipments at 6.6 million barrels a day in August, 1 million lower than a year earlier.

Gold rose less than 0.1 percent to $1,255.92.

Bonds

The yield on U.S. 10-year Treasuries dropped less than one basis point to 2.25 percent.

Australian benchmark yields rose one basis point to 2.69 percent.