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Stocks Waver With Focus on Tariffs; Kiwi Jumps: Markets Wrap

By Rob Verdonck
Shipping containers at the Bayport Container Terminal at the port of Houston in Seabrook, Texas, US, on Friday, Oct. 4, 2024. Dockworkers at US East and Gulf coast ports have agreed to start moving cargo again while they continue collective bargaining with their employers on a new contract, the union representing the workers said in a statement on Thursday. (Mark Felix/Bloomberg)

(Bloomberg) -- Stocks in Asia traded range-bound after Donald Trump’s tariff plan roiled emerging markets in the previous session. The New Zealand dollar jumped after the central bank signaled a slower pace of easing ahead.

The MSCI Asia Pacific Index dipped less than 0.1% following a 0.6% drop on Tuesday. Equities fell in Japan and Hong Kong, while those in Australia advanced. US equity futures were little changed after the S&P 500 notched another record. A Bloomberg gauge of the dollar slipped 0.1%, paring some of its strength seen on Tuesday that pressured the Mexican peso and Chinese yuan, among others. 

The president elect’s tariffs agenda seemed to gather further momentum on Wednesday, with the transition team said to be readying an announcement of Jamieson Greer as US Trade Representative. Greer was intimately involved in Trump’s first-term trade policy decisions. A slew of data from the US due later on inflation and economic growth may provide clues to how the Federal Reserve will respond in December. 

“Prospects of further US tariffs remain a worry for Asian markets,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc. The appointment of Greer as USTR, if confirmed, indicates “a more restrictive trade stance by the US under the Trump administration.” 

New Zealand’s dollar advanced as much as 0.8% after the Reserve Bank lowered the official cash rate by 50 basis points as expected, and presented a new forecast for next year that showed it may move to more gradual rate cuts.

Trump is also said to have selected Kevin Hassett to lead the National Economic Council, a role spearheading the new administration’s tax, trade and spending agenda.

Middle East tensions abated somewhat as President Joe Biden said Israel reached a cease-fire deal with the Lebanese militant group Hezbollah after weeks of talks mediated by the US. 

While US stocks gained on Tuesday, the bond market response was mild following its second-biggest advance this year. Fed officials indicated support for a careful approach to rate cuts, according to minutes from their latest policy meeting. US 10-year yields advanced three basis points to 4.31% and traded little changed in Asia trading. 

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That comes as a bearish tone takes hold in the market for interest-rate options, suggesting that traders are bracing for Treasury yields to surge anew in the coming weeks. The wagers are a reminder that even though yields have surrendered the brunt of their post-election advance, investors are well aware of the potential for the so-called Trump trade to gain traction again. 

In commodities, oil was little changed early Wednesday after an industry report showed a drop in US stockpiles and traders looked to an OPEC meeting this weekend. Gold was steady. 

Key events this week:

  • US PCE, initial jobless claims, GDP, Wednesday
  • Eurozone consumer confidence, Thursday
  • US Thanksgiving holiday. Markets closed, Thursday
  • Eurozone CPI, Friday
  • ECB releases consumer expectations survey for October, Friday
  • “Black Friday,” the traditional start of the US holiday shopping rush

Some of the main moves in markets:

Stocks

  • S&P 500 futures were little changed as of 10:31 a.m. Tokyo time
  • Japan’s Topix fell 0.6%
  • Australia’s S&P/ASX 200 rose 0.4%
  • Hong Kong’s Hang Seng rose 0.1%
  • The Shanghai Composite fell 0.2%
  • Euro Stoxx 50 futures fell 0.1%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro was unchanged at $1.0489
  • The Japanese yen rose 0.2% to 152.74 per dollar
  • The offshore yuan was little changed at 7.2597 per dollar

Cryptocurrencies

  • Bitcoin rose 0.8% to $92,387.62
  • Ether rose 0.1% to $3,326.9

Bonds

  • The yield on 10-year Treasuries was unchanged at 4.31%
  • Japan’s 10-year yield declined one basis point to 1.060%
  • Australia’s 10-year yield was little changed at 4.45%

Commodities

  • West Texas Intermediate crude was little changed
  • Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Tracy Withers.

©2024 Bloomberg L.P.