Asian Stocks Down as Miners Decline; Yen Gains: Markets Wrap – Bloomberg

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Stocks are poised for the longest losing streak in two years as the technology, mining, consumer and industrial sectors led declines. Japan equities fell sharply, as did Hong Kong’s Hang Seng Index. The Australian dollar and bond yields tumbled as traders dialed back expectations for higher interest rates after growth missed estimates.

The MSCI Asia Pacific Index is set to fall for eight days, making it the longest run of losses since 2015. American shares fell, with an afternoon swoon wiping out early gains for a second straight day, as investors assessed the impact of proposed tax cuts. Ten-year Treasury yields slid to 2.33 percent, while the dollar held onto gains. The pound extended declines amid stalled Brexit negotiations, and the yen jumped.

Investors are “locking in profits earlier than usual for the year and not opening any new positions,” said Andrew Clarke, director of trading at Mirabaud (Asia) Ltd. “Eventually, as profit taking subsides, buying for the new year will appear as people look toward 2018,” he added.

Australia’s third-quarter GDP climbed 2.8 percent from a year earlier versus a forecast of 3 percent, reinforcing expectations for the central bank to stand pat on rates for much of next year. The Reserve Bank of Australia has signaled no near-term policy change as household spending slows amid lofty debt levels and stagnant wage growth.

Richard Lacaille of State Street Global Advisors discusses volatility in markets and his outlook for equities.

Source: Bloomberg

A surge in global equities that drove indexes to record highs has stalled as investors lock in profits and await catalysts that would provide reason to add to risk assets before the year draws to a close. Friday’s U.S. jobs report is the next big data release on the calendar. House and Senate lawmakers are poised to begin working on compromise tax-overhaul legislation — a key step in their drive to send a bill with tax cuts for corporations and individuals to President Donald Trump by the end of the year.

Terminal customers can read more in our Markets Live blog.

Here are some of the key events facing markets in the coming days:

  • The European Commission College of Commissioners discusses Brexit on Wednesday and will likely make its recommendation on whether sufficient progress has been made to move negotiations onto the future relationship.
  • The U.S. faces a partial government shutdown after money runs out on Dec. 8 if Congress can’t agree on a spending bill by then.
  • U.S. employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report Friday may also show a bump up in average hourly earnings.

These are the main moves in markets:

Stocks

  • Euro Stoxx 50 futures fell 0.9 percent in early European trading. S&P 500 Index futures fell 0.2 percent. The underlying gauge slipped 0.4 percent. 
  • The Topix index was down 1.4 percent at the close in Tokyo. The Nikkei 225 Stock Average lost 2 percent.
  • Australia’s S&P/ASX 200 Index declined 0.4 percent. South Korea’s Kospi index fell 1.4 percent.
  • Hong Kong’s Hang Seng Index lost 1.8 percent as Chinese companies traded in the city dropped. The Shanghai Composite Index fell 0.3 percent.
  • The MSCI Asia Pacific Index declined 1.2 percent.

Currencies

  • The Bloomberg Dollar Spot Index was little changed.
  • The Aussie dollar declined 0.3 percent to 75.82 U.S. cents.
  • The yen rose 0.5 percent to 112.04 per dollar.
  • The euro was little changed at $1.1829.
  • The pound remained lower, decreasing 0.3 percent to $1.3400.

Bonds

  • The yield on 10-year Treasuries fell to 2.33 percent, down from around 2.40 percent a week ago.
  • German 10-year bund yields were two basis points down at 0.30 percent.

Commodities

  • West Texas Intermediate crude fell 0.4 percent to $57.42 a barrel.
  • Gold was at $1,268.53 an ounce after falling 0.8 percent on Tuesday.
  • Copper futures were up 0.6 percent after plunging 4.7 percent, the most since January 2015.