Asian Stocks Set to Decline; Dollar Advances: Markets Wrap

(Bloomberg) -- Asian equities look set to open lower Tuesday after most U.S. shares declined ahead of a slew of key earnings reports this week. The dollar rose to the highest level in two months.

Futures pointed to losses in Japan, Hong Kong and Australia. Chinese futures also declined, suggesting the biggest jump in more two years in the nation’s equities Monday may not extend. In the U.S., banks weighed on the S&P 500 Index, while energy producers slumped as crude traded at a five-week low. The FANG cohort lifted tech-heavy Nasdaq indexes ahead of megacap earnings from the likes of Alphabet and Twitter. Treasury yields were steady around 3.20 percent.

Risks still abound across global markets, from the continuing U.S.-China trade showdown and tension surrounding the killing of a Saudi journalist to Italian budget fears and President Donald Trump’s unpredictable actions ahead of American midterm elections. Still, equities are attempting to steady after a miserable few weeks, and company results from the likes of Amazon, Alphabet, Microsoft and Intel as well as U.S. growth data may provide a stimulus in the coming days.

“It’s early days with under 15 percent of companies having reported [earnings], but the beats have been above average, and margin strength has continued despite some concerns about higher input costs,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “That said, corporate earnings calls have highlighted several potential and real headwinds as we face 2019.”

Elsewhere, Italian bonds pared an advance after the government called for a budget dialogue with the European Union to address their differences. The pound retreated as the U.K. blurred more red lines in its Brexit negotiations, heightening the danger to Prime Minister Theresa May. Gold dropped and the South African rand rallied before the country’s budget.

Terminal readers can read more in our Markets Live blog.

Here are some key events coming up this week:

• Earnings season gathers pace with notable highlights including Amazon.com, Alphabet, Intel, Verizon, Microsoft, Twitter, McDonald’s, UBS, Deutsche Bank, Barclays, Total, United Technologies, Caterpillar, Halliburton and Linde.
• Monetary policy decisions are due in Europe, Indonesia, Sweden and Canada.
• ECB policy makers could on Thursday confirm that asset purchases will end this year, reiterating its pledge to keep interest rates at record lows through summer 2019. President Mario Draghi will hold a press conference.
• U.S. gross domestic product growth may have slowed in the third quarter, yet remained near its best pace since mid-2015, according to forecasts ahead of Friday’s release.

And these are the main moves in markets:

Stocks

• Futures on the Nikkei 225 Stock Average fell 0.9 percent in Singapore.
• Futures on the S&P/ASX 200 Index dropped 0.2 percent.
• Hong Kong Hang Seng Index contracts lost 0.5 percent.
• FTSE China A50 futures were declined 0.4 percent.
• The S&P 500 fell 0.4 percent and the Nasdaq Composite Index gained 0.3 percent.
• The MSCI Emerging Market Index jumped 1.1 percent.

Currencies

• The yen was steady at 112.80 per dollar after weakening 0.2 percent.
• The offshore yuan was stable at 6.9397 per dollar.
• The Bloomberg Dollar Spot Index increased 0.3 percent Monday.
• The euro was at $1.1465 after falling 0.4 percent.

Bonds

• The yield on 10-year Treasuries was little changed at 3.19 percent.

Commodities

• Crude oil increased 0.4 percent to $69.52 a barrel.
• Gold dropped 0.4 percent to $1,222.43 an ounce, the first decline in three days.

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