(Bloomberg) -- Asian stocks pared earlier losses to trade mostly flat Thursday as investors awaited clarity on when the next steps in the U.S. and China trade negotiations might happen. The dollar held near a nine-month high and Treasury yields declined.
Equities were little changed across the region having climbed from intraday lows in thin trading. U.S. futures pared losses though European contracts were lower. Earlier, the S&P 500 Index closed higher on below average volume. The yen was stronger after Trump administration officials appeared to show no urgency in resolving the trade fight. The pound held losses after U.K. Prime Minister Boris Johnson moved to suspend parliament, increasing the risk of a no-deal Brexit.
Investor sentiment remains fragile after President Donald Trump’s recent pronouncements on trade and as optimism for a resolution becomes more difficult to sustain. Treasury Secretary Steven Mnuchin said U.S. trade officials expect Chinese negotiators to visit Washington, but wouldn’t say whether a previously planned September meeting would take place, while White House trade adviser Peter Navarro played down a quick resolution.
“There’s no appetite to actively trade equities right now,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo. “Investors’ current stance probably is to see through carefully what kind of impact the latest tariff hike has on the global economy.”
Meanwhile, the bond rally continues unabated, with the yield on 30-year U.S. Treasuries sinking to a record low of 1.90% Wednesday. Mnuchin said issuing ultra-long U.S. bonds is “under very serious consideration” in the Trump administration, possibly setting up a move that would mark a historic revamp of the $16 trillion Treasuries market.
Elsewhere, oil slipped as growth worries outweighed signs that OPEC supply cuts are draining U.S. inventories. Asian currencies were little changed after Mnuchin said the U.S. doesn’t intend to intervene on the dollar for now.
Events to keep an eye on this week:
- The second reading of Q2 U.S. GDP Thursday is expected to refine estimates of slightly lower economic growth.
- Bank of Korea policy decision and briefing is on Friday.
- Euro-zone CPI data for August is also due Friday.
Stocks
- The MSCI Asia Pacific Index fell 0.1% as of 1:24 p.m. in Tokyo.
- Topix index was flat.
- Australia’s S&P/ASX 200 Index rose 0.1%.
- South Korea’s Kospi index dropped 0.2%.
- Hang Seng Index was little changed.
- Shanghai Composite Index was flat.
- S&P 500 futures fell 0.2%. Earlier, the S&P 500 Index rose 0.7%.
- The yen rose 0.2% to 105.92 per dollar.
- The offshore yuan fell 0.1% to 7.1748 per dollar.
- Bloomberg Dollar Spot Index was little changed after gaining 0.2% to the highest since November.
- The euro was steady at $1.1081, near the weakest in more than two years.
- The British pound fell 0.1% to $1.2205 after sliding 0.6% Wednesday.
- The yield on 10-year Treasuries fell three basis points to 1.45%.
- Australia’s 10-year bond yield lost two basis points to 0.86%.
- West Texas Intermediate crude dipped 0.4% to at $55.59 a barrel after rising 1.6%.
- Gold rose 0.3% to $1,543 an ounce.