Stocks in Asia Set for Muted Start; Dollar Gains: Markets Wrap

(Bloomberg) -- Asian stocks were set for a cautious start Wednesday as U.S. equities struggled to make headway in the absence of market-moving catalysts. The dollar climbed for a fifth day.

Futures pointed to a flat start in Japan, while equities in Australia opened with a small gain, after the S&P 500 Index closed little changed. The yield on 10-year Treasuries remained steady as Federal Reserve Bank of Boston President Eric Rosengren said it may take policy makers “several meetings” to determine whether risks to the U.S. economy will clear up or more seriously hamper growth in 2019.

“Investors have already priced in a lot of good news,” Michael Arone, chief investment strategist at State Street Global Advisors, told Bloomberg TV in New York. “What we now need to see is a real stabilization in economic growth and corporate profits.”

Investors are looking for firm details about a possible U.S.-China trade deal that’s helped drive a surge in global equities over the past two months. The bond market signals more caution and Morgan Stanley is now predicting Treasury yields will drop as low as 2.35 percent by the end of the year. Traders will get the latest read on U.S. growth Friday with the monthly jobs report after China on Tuesday lowered its target for economic growth.

Elsewhere, oil slipped after an industry report showed a bigger-than-expected build in U.S. crude stockpiles. The pound dipped as Reuters reported European Union-U.K. Brexit talks failed to reach a deal in Brussels on Tuesday and will resume on Wednesday.

Here are some key events coming up:

• Bank of Canada Governor is expected to keep rates on hold Wednesday due to lingering uncertainty on housing and investment, while sticking to his message that borrowing costs eventually need to head higher.
• European Central Bank policy makers are expected to leave rates unchanged amid a deteriorating outlook. President Mario Draghi will hold a news conference on Thursday after the decision.
• The U.S. jobs report Friday may show hiring moderated in February. Nonfarm payrolls may have increased by 185,000 while the jobless rate fell to 3.9 percent, according to estimates.

These are the latest moves in markets:

Stocks

• Futures on the S&P 500 slid 0.2 percent. The underlying gauge fell 0.1 percent Tuesday.
• Futures on Japan’s Nikkei 225 were flat.
• Australia’s S&P/ASX 200 Index added 0.1 percent.
• Hang Seng futures rose 0.3 percent.

Currencies

• The yen was steady at 111.90 per dollar.
• The offshore yuan was flat at 6.7063 per dollar.
• The Bloomberg Dollar Spot Index increased 0.2 percent Tuesday.
• The euro fell 0.1 percent to $1.1303.
• The British pound slid 0.2 percent to $1.3152.

Bonds

• The yield on 10-year Treasuries was little changed at 2.72 percent.
• Australia’s 10-year bond yield held at 2.16 percent.

Commodities

• West Texas Intermediate crude fell 0.6 percent to $56.25 a barrel.
• Gold added 0.1 percent to $1,287.20 an ounce.

©2019 Bloomberg L.P.