SHANGHAI (Reuters) – Asian equities fell on Friday as worries over the resumption of Sino-US trade tensions weighed on sentiment before China's trade data was released in June, although expectations of the Chinese market have been rising. 39 Federal Reserve rate cuts later this month helped to limit losses.
PHOTO FILE: Passersby pass by an electric screen showing Asian market indices outside a broker in Tokyo, Japan, on July 1, 2019. REUTERS / Issei Kato
These bets remained strong despite rising US consumer inflation in June and brought the S & P 500 index back to a record high on Thursday. The future S & P 500 ESc1 e-mini futures grew by 0.21% to 3,010.25.
Federal Reserve Chairman Jerome Powell said Thursday that a rate cut is likely at the Fed's next meeting as companies slow their investments due to trade disputes and slowing global growth.
Friday, the widest index of MSCI Asia Pacific shares out of Japan .MIAPJ0000PUS was down 0.05% in the first transactions, as Australian stocks fell 0.16% and Japan's Nikkei stock index, 0.11%, to 0.11%.
"The markets have become somewhat calm in the saga of the US-China trade war since the announcement of a truce and the resumption of trade talks at the G20 meeting. Unfortunately, the headlines are starting to appear again, "ANZ analysts wrote in a morning note.
US President Donald Trump said Thursday that China was not keeping the promises it had made by buying agricultural products from US farmers.
"Even if it was not a big engine of the market, it reminded that the situation could still deteriorate," said analysts.
Later on Friday, China will release its trade data for the month of June. Analysts expect exports to fall, global demand down and a sharp rise in US tariffs weigh more heavily on the largest trading nation in the world.
On Thursday, the S & P 500 .SPX index gained 0.23% to close at a closing record of 2,999.91 points. L & # 39; s index. Jones, the Dow Jones Industrial Average, also hit a record high of 27,088.08 points, up 0.85%.
Nasdaq Composite .IXIC lost 0.08%.
US Treasury yields rose after the low demand for a 30-year bond auction valued at $ 16 billion on Thursday and after the US Department of Labor announced that its index Consumer prices excluding food and energy rose 0.3% in June, its largest increase since January 2018.
The poorly received bids pushed the 30-year yield to 2.662% on Thursday, according to Refinitiv data.
The benchmark 10-year Treasury yield, US10YT = RR, was last reported at 2.1331%, compared with 2.12% at closing in the United States on Thursday, while the 30-year yield reached 2.6512%, compared with a closing at 2.639%.
The two-year US2YT = RR return, which increases with traders' expectations for higher federal funds rates, was 1.8605% after closing 1.852%.
"The CPI report will have no significant impact on the Fed's forecast, nor on the big debate around 25 or 50," said Stephen Innes, managing partner of Vanguard Markets Pte, referring to the expectations of a rate cut in July. .
"After all, the FOMC is undoubtedly willing to let inflation warm up after spending almost a decade trying to light those flames," he said.
The dollar fell 0.09 percent against the yen to JPY 108.38, while the euro edged up 0.06 percent to hit $ 1.1259.
The .DXY dollar index, which follows the greenback against a basket of six major rivals, remained unchanged at 97.044.
Oil prices rallied after tumbling Thursday after the Organization of Petroleum Exporting Countries announced its hope that the world would need 29.27 million barrels of crude oil a day from its members in 2020 or 1.34 million barrels a day. year.
The global benchmark for Brent LCoC1 rose 0.53% to $ 66.87 a barrel and the US CLT1 US crude (WTI) rose 0.61% to 60, $ 57 a barrel.
Gold prices, weakened by stronger than expected US consumption inflation data, have regained some shine. XAU spot = last traded up 0.28% to $ 1,407.56 an ounce.
Reportage by Andrew Galbraith; Edited by Shri Navaratnam