Asia stocks brush off Wall Street slide after Trump’s comments


Syndicated News
Written by Syndicated News

SINGAPORE, Aug 24 2017 :  Asian stocks edged up today, shaking off the risk aversion that gripped financial markets overnight after U.S. President Donald Trump’s threat to shut down the government, though the dollar remained sluggish.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.15 percent in early trade.

Japan’s Nikkei .N225 pulled back 0.25 percent on a stronger yen.

Overnight, U.S. stock indexes closed between 0.3 percent .IXIC .SPX and 0.4 percent .DJI lower.

Trump said at a Tuesday night rally in Arizona that he would be willing to risk a government shutdown to secure funding for a wall along the U.S.-Mexico border. Those comments came ahead of a late-September deadline to raise the U.S. debt ceiling or risk defaulting on debt payments.

Fitch Ratings said yesterday that a failure to raise the federal debt ceiling in a timely manner would prompt it to review the U.S.’s sovereign rating “with potentially negative implications.”

 While the dollar managed to limit losses yesterday in Asia following Trump’s comments, it resumed declines during the U.S. day and failed to recover today.

The dollar was little changed at 108.98 yen JPY=D4, having lost 0.5 percent overnight.

The dollar index, which tracks the greenback against a basket of six major peers, was steady early today, following the previous day’s 0.4 percent slide.

Trump “is using one of his tricks to get what he wants and does not seem to care what could be the consequence of the U.S. shutdown on the economy,” said Naeem Aslam, chief market analyst at Think Markets. “What matters the most for Mr. Trump is to build the wall, which he promised throughout his campaign.”

Also undermining the dollar were Trump’s threats to end the North American Free Trade Agreement, after three-day first-round talks that ended on Sunday failed to bridge differences.

Further rounds of talks will take place in September and later this year.

The Canadian dollar CAD=D4 extended its gains, with the U.S. dollar down 0.1 percent at C$1.254, while the Mexican peso MXN= was marginally stronger at 17.681 to the dollar.

The euro EUR=EBS was almost 0.1 percent stronger after strong German and French manufacturing and services sector surveys on Wednesday.

Investors are also keeping a close eye on a central banking conference in Jackson Hole, Wyoming, which begins today, where Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are both due to speak, though they don’t expect any new policy messages.

“We are inclined to think that the Jackson Hole symposium will probably disappoint, with central bankers preferring to explain detailed actions in September,” Michala Marcussen, chief economist, and Guy Stear, head of emerging markets and credit research, at Societe Generale, wrote in a note.

U.S. crude was little changed at $48.39 a barrel, after rising 2.2 percent over the previous two sessions.

Global benchmark Brent was also flat at $52.59, after climbing 1.8 percent in the past two days.

Gold was also steady at $1,289.69 an ounce, retaining yesterday’s 0.4 percent jump.




About the author

Syndicated News

Syndicated News

News sourced from Bernama, Reuters, AFP and other accredited news agencies, including credible blogsites and news portals.