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Asia set for mixed open and U.S. stocks slid overnight as investors assessed geopolitical risks and tech stocks extended their decline to an eighth straight session.
The Japanese currency breached 110 yen per dollar for the first time since November, and its strength is helping push down Nikkei 225 index contracts. Stock futures for Australia, South Korea and Taiwan foreshadow gains.
Market volatility climbed as North Korea warned of a nuclear strike if provoked, while President Donald Trump said the U.S. would resolve the problems with or without China. Secretary of State Rex Tillerson urged Russia to abandon its support of Syrian President’s regime. The VIX or so-called fear gauge, climbed to a level unseen since November.
A top outside adviser to President Donald Trump said the U.S. probably won’t name China a currency manipulator in a report due this month, a move that would break a key campaign promise and another sign of capitulation on the administration’s tough trade talk. In the last October report, the US Treasury noted that China has actually been intervening in exchange markets to prop up the yuan. While the currency has dropped 6.5 percent against the dollar this year, it has appreciated nearly 17 percent since 2005, when China loosened its peg against the greenback.
Yuan forwards advance for the first in six days, as the central bank keeps a tight rein on cash supply and the dollar weakens.Markets.
Onshore yuan’s 12-month non-deliverable forwards rise 0.07% to 7.1065 per dollar as of 4:43 p.m. in Hong Kong; contracts are poised to halt a six-day decline, longest stretch since Dec. 16
China’s Bargain Banks Missing Rally as Debt Woes Spook Investors. On a price versus book value basis, Chinese financial firms are trading at the biggest discount since 2004 to both the MSCI China Index and their Asian peers, and the stocks have underperformed all but two other industry groups this year.
Hongkong’s government tightened property rules for the second time since November to shut a loophole that allowed investors to snap up multiple units in one shot to qualify for lower tax rates. The new rules, intended to prevent the purchasing of several properties in one contract to avoid stamp duties, took effect from midnight, Hong kong Chief Executive Leung Chun-ying said in a briefing late Tuesday. First-time home buyers acquiring more than one property in a single contract need to pay 15 percent in taxes, Leung said.
Chancellor Angela Merkel has spent much of her time in office rejecting proposals to pool euro-area debt. Now it might just help her bid for re-election as German voters have consistently backed Merkel’s stance. A European Union survey in November found that Germany has the least public backing for so-called euro bonds among EU countries, with just 24 percent saying they were in favor. That compared with 55 percent support in Portugal and 50 percent in Greece.
Market in details
AUD/USD little changed at 0.75. AUD consolidating losses within a short-term downtrend; sustained close below 0.7490 opens path toward January lows around 0.7200. April consumer confidence data ahead; March rose 0.1% m/m to 99.7
JPY was steady against the dollar after jumping 1.2 percent on Tuesday, the biggest jump since January.
NZD/USD pared losses mid-morning but remains lower and within a trend below 0.7000
US Treasury 10 year yield dropped seven basis points to 2.297 percent on Tuesday.
Australia government bonds gain following a rally in Treasuries as geopolitical tensions flared up and the Vix volatility index spiked to November highs. 3-year yield falls 1bp to 1.77%. 10-year yield declines 2bps to 2.51%
S&P 500 down 0.1% to 2,353.78. It has traded above the 50 day average for 105 sessions, longest streak since 2011
Dow Jones little changed to 20,651.30
Nasdaq down 0.2% to 5,866.77
Gold spot up 1.6% to $1,271.20
WTI Futures up 0.6% to 53.40