Asian stocks were mixed, U.S. equity futures pared gains and the yen reversed losses as traders assessed the likelihood the fallout of an American-led strike on Syria could be contained. Crude oil dropped.
Japanese and Australian shares advanced, while equities in Hong Kong and China had the steepest losses in Asia. The yen, a proxy for risk aversion, bounced as polls showed falling support for Japanese Prime Minister Shinzo Abe’s government, which has favored a weaker currency. The dollar remained under pressure as CFTC data showed hedge funds are the most bearish on the greenback in five years. U.S. 10-year Treasury yields ticked higher.
“There was a significant fear of potential escalation; that hasn’t happened so far,” said Callum Henderson, a Eurasia Group managing director in Singapore. Even so, “it remains to be seen how long this market rally lasts on the back of this specific factor — whether or not, or when, Russia retaliates,” he said on Bloomberg Television.
U.S. President Donald Trump declared “mission accomplished” via Twitter on Saturday, a day after the U.S., France and the U.K. launched military strikes in response to Syrian leader Bashar al-Assad’s suspected chemical attack on civilians. While geopolitical concern linger, focus this week is back on earnings season in the U.S. and a slew of Federal Reserve officials who are due to speak, including the incoming head of the New York Fed, John Williams.
Elsewhere, oil fell back below $67 a barrel amid higher production concerns. Gold extended Friday’s gains.
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Here’s what to watch out for this week:
- Goldman Sachs Group Inc. and Morgan Stanley among companies reporting results
- John Williams, soon to be president of the New York Fed, speaks on economic outlook in Madrid on Tuesday.
- China GDP and Japanese inflation are the featured data points in Asia.
- Trump welcomes Japan Prime Minister Shinzo Abe to Mar-a-Lago on Tuesday. North Korea and trade will probably be discussed.
- Mining investors will get to take the pulse of the global industry this week, with Vale, Rio Tinto and BHP offering quarterly production reports.
Here are the main moves in markets:
- Japan’s Topix index rose 0.3 percent as of 2:16 p.m. in Tokyo.
- Australia’s S&P/ASX 200 Index gained 0.2 percent.
- Kospi index was little changed.
- Hong Kong’s Hang Seng Index fell 1.6 percent and the Shanghai Composite Index lost 1.4 percent.
- Futures on the S&P 500 Index gained 0.4 percent. The underlying gauge fell 0.3 percent Friday.
- The MSCI Asia Pacific Index declined 0.2 percent.
- The Japanese yen rose 0.1 percent to 107.21 per dollar.
- The euro traded flat at $1.2331.
- The British pound increased 0.1 percent to $1.4253.
- The Bloomberg Dollar Spot Index was little changed after falling 0.5 percent last week.
- The yield on 10-year Treasuries held at 2.83 percent.
- Japan’s 10-year bond yield was unchanged at 0.035 percent.
- The Australian 10-year bond yield was steady at 2.74 percent.
- West Texas Intermediate crude lost 0.9 percent to $66.82 a barrel.
- Gold was steady at $1,346.04 an ounce.
— With assistance by Ivan Levingston