Asia Stocks Set for Mixed Start; Crude Slumps: Markets Wrap

(Bloomberg) -- Asian stocks headed for a mixed start ahead of key data on China’s economy, following a topsy-turvy session for U.S. equities that saw tech shares rally and energy shares slide. Oil’s unprecedented slump deepened.

Futures pointed to a dip in Japanese stocks, while shares in Hong Kong were indicated higher. Australia shares opened flat. The S&P 500 Index finished Tuesday lower as a surge in optimism over trade talks with China was offset by the plunging crude price, with U.S. oil sliding more than 7 percent. Treasuries climbed and the dollar fell from an 18-month high. The pound extended gains amid optimism the U.K. and the European Union have agreed on a draft Brexit divorce deal.

Risk appetite had built Tuesday morning in the U.S. after White House economic adviser Larry Kudlow told CNBC that the U.S. and China are talking on “all levels” of government. That followed an overnight report that China’s Vice Premier Liu He will pave the way for a meeting between the leaders of the two biggest economies later this month.

Focus now turns to Federal Reserve Chair Jerome Powell who speaks Wednesday, with some observers expecting him to calm worries about the central bank pushing its interest rate-hike cycle too far. Before that, investors will get the latest read on China’s economy -- factory output may have risen in October as plants rushed orders ahead of U.S. tariffs and the government stepped up infrastructure spending. Retail sales growth is also forecast to hold.

Italian assets are back in focus after Premier Giuseppe Conte’s office said its government is challenging the European Commission in the reply it is due to deliver by a Tuesday deadline, sticking to its budget deficit and growth targets for next year despite protests from Brussels.

Elsewhere, the pound extended gains following a report that key ministers will back U.K. Prime Minister Theresa May’s draft Brexit agreement after months of negotiations. The Stoxx Europe 600 Index rose for the first time in three days, with telecom firms leading the way after Vodafone Group Plc’s results.

Terminal users can read more in our Markets Live blog.

Coming Up

• Chinese industrial production and retail sales data due Wednesday.
• Fed’s Powell discusses national and global economic issues with Dallas Fed President Robert Kaplan at an event hosted by the Dallas Fed.
• U.S. consumer inflation probably rebounded in October after easing in September. The consumer price index data is projected to show a 0.3 percent increase from the prior month.
• Policy decisions are coming from central banks in Mexico, Philippines, and Thailand.

These are the main moves in markets:

Stocks

• Futures on Japan’s Nikkei 225 Stock Average fell 0.2 percent in Singapore.
• FTSE China A50 futures slid 0.2 percent.
• Hang Seng Index futures climbed 0.5 percent.
• Australia’s S&P/ASX 200 Index opened flat.
• The S&P 500 Index fell 0.2 percent. Futures on the S&P 500 were little changed.

Currencies

• The yen was steady at 113.81 per dollar.
• The offshore yuan held at 6.9466 per dollar.
• The Bloomberg Dollar Spot Index dipped 0.2 percent Tuesday.
• The euro gained 0.1 percent to $1.1300.
• The pound gained 0.5 percent to $1.3036.

Bonds

• The yield on 10-year Treasuries dipped four basis points to 3.14 percent.

Commodities

• West Texas Intermediate crude fell 0.7 percent to $55.31 a barrel, after sliding 7.1 percent to an 11-month low.
• Gold futures were little changed at $1,202.70 an ounce.
• LME copper rose 0.4 percent to $6,073 a metric ton on Tuesday.
• The Bloomberg Commodity Index fell 0.7 percent to an eight-week low on Tuesday.

©2018 Bloomberg L.P.