Asian Stocks Set for Mixed Start; Pound Steady: Markets Wrap

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The rally that drove Asian equities to a six-week high looked set to stall Wednesday, with futures indicating a mixed start to trading. The pound steadied after U.K. politicians voted down a Brexit deal.

Shares in Australia opened little changed and futures in Japan and Hong Kong pointed to a muted start, despite the S&P 500 Index rising the most in a week. Tuesday’s gains in risk assets were spurred in part by signs of more stimulus to come in China. The 10-year Treasury yield was at 2.71 percent, while the dollar advanced against major peers. The yield spread between five-year and 30-year Treasuries steepened, touching a level unseen since February amid further comments from Federal Reserve officials stressing patience when it comes to policy changes.

U.K. Prime Minister Theresa May’s Brexit deal was overwhelming rejected in the House of Commons. She now has to revamp her proposal by the end of March and faces a confidence vote in Parliament on Wednesday. FTSE 100 Index futures trimmed gains. Elsewhere, the euro dropped after European Central Bank President Mario Draghi said the economy is weaker than expected.

An easing of U.S.-China trade tensions and dovish commentary from the Federal Reserve have spurred rallies in risk assets in January, and news of further China stimulus was warmly received this week. Still, a slew of headwinds from slowing earnings growth to Brexit and the ongoing partial U.S. government shutdown threaten the positive sentiment.

Oil trades around $52 a barrel in New York, holding Tuesday’s advance as investors anticipate another decline in U.S. crude inventories.

Here are some important events coming up:

• A confidence motion vote will take place at 7 p.m. in London as the opposition Labour Party tries to force a general election.
• Some of the world’s biggest banks announce earnings, including Bank of America, Morgan Stanley and Goldman Sachs. Alcoa, Indian IT company Mindtree, Netflix, Taiwan Semiconductor and BlackRock also post results.

These are the main moves in markets:

Stocks

• Futures on Japan’s Nikkei 225 were flat in Singapore.
• Hang Seng futures slid 0.1 percent.
• Australia’s S&P/ASX 200 Index was little changed.
• Futures on the S&P 500 added 0.2 percent. The S&P 500 Index rose 1.1 percent.
• The MSCI Emerging Market Index gained 1.3 percent.

Currencies

• The yen held at 108.65 per dollar.
• The offshore yuan was at 6.7711 per dollar.
• The Bloomberg Dollar Spot Index climbed 0.3 percent.
• The euro bought $1.1410.
• The British pound was little changed at $1.2861 after falling as much as 1.5 percent.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.71 percent Tuesday.
• Australia’s 10-year bond yield held at 2.29 percent.

Commodities

• West Texas Intermediate crude dipped 0.3 percent to $51.94 a barrel after climbing 3.2 percent.
• Gold was flat at $1,289.56 an ounce.
• The Bloomberg Commodity Index rose 0.3 percent for a second day Tuesday.

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