Stocks Waver, Dollar Slips With Focus on Tariffs: Markets Wrap

(Bloomberg) — Stocks in Asia saw a muted open after Donald Trump’s tariff plan roiled emerging markets in the previous session. 

Equities opened higher in Sydney, while dipping in Tokyo and Seoul. US equity futures were little changed after the S&P 500 rose for a seventh day to notch its 52nd record this year. A Bloomberg gauge of the dollar slipped 0.1%, paring some of its strength seen on Tuesday that pressured the Mexican peso and Chinese yuan, among others. 

Trump’s tariff plan seemed to gather further momentum on Wednesday, with the president-elect’s transition team said to be readying an announcement of Jamieson Greer as US Trade Representative. A longtime protégé of Robert Lighthizer, the selection highlights the key role tariffs will play in the new administration’s economic agenda.  

China “is likely to respond cautiously at first to Trump’s threats, until it gets a better sense of the balance between confrontation and deal-making in his second term,” said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis.

Middle East tensions abated somewhat as President Joe Biden said Israel reached a cease-fire deal with the Lebanese militant group Hezbollah after weeks of talks mediated by the US. While anticipation of the announcement sent oil lower on Tuesday, crude was little changed early Wednesday after an industry report showed a drop in US stockpiles and traders looked to an OPEC meeting this weekend.  

In Asia, key events include Australia’s inflation and a central bank decision in New Zealand, where a rate cut of 50 basis points is expected.   

While US stocks gained on Tuesday, the bond market response was mild following its second-biggest advance this year. Federal Reserve officials indicated support for a careful approach to rate cuts, according to minutes from their latest policy meeting. US 10-year yields advanced three basis points to 4.31%. 

That comes as a bearish tone takes hold in the market for interest-rate options, suggesting that traders are bracing for Treasury yields to surge anew in the coming weeks. The wagers are a reminder that even though yields have surrendered the brunt of their post-election advance, investors are well aware of the potential for the so-called Trump trade to gain traction again. 

Key events this week:

• US PCE, initial jobless claims, GDP, Wednesday
• Eurozone consumer confidence, Thursday
• US Thanksgiving holiday. Markets closed, Thursday
• Eurozone CPI, Friday
• ECB releases consumer expectations survey for October, Friday
• “Black Friday,” the traditional start of the US holiday shopping rush

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 9:18 a.m. Tokyo time
• Hang Seng futures were little changed
• Japan’s Topix fell 0.5%
• Australia’s S&P/ASX 200 rose 0.6%
• Euro Stoxx 50 futures were little changed

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro was little changed at $1.0495
• The Japanese yen was little changed at 152.96 per dollar
• The offshore yuan was little changed at 7.2543 per dollar

Cryptocurrencies

• Bitcoin rose 0.7% to $92,288.6
• Ether rose 0.4% to $3,335.02

Bonds

• The yield on 10-year Treasuries was little changed at 4.30%
• Japan’s 10-year yield declined one basis point to 1.060%
• Australia’s 10-year yield declined one basis point to 4.43%

Commodities

• West Texas Intermediate crude was little changed
• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rob Verdonck.

©2024 Bloomberg L.P.