Final hours! Save up to 50% OFF InvestingProCLAIM SALE

GLOBAL MARKETS-Asian stocks find modest support on firmer U.S. futures

Published 2019-08-27, 09:03 p/m
© Reuters.  GLOBAL MARKETS-Asian stocks find modest support on firmer U.S. futures
USD/JPY
-
XAU/USD
-
US500
-
JP225
-
GC
-
ESU24
-
CL
-
US2YT=X
-
US10YT=X
-
MIAPJ0000PUS
-

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Shares stabilise but risks to global economy remain

* Treasury yield curve inversion gets deeper

* Policymakers being forced to support economic growth

By Stanley White

TOKYO, Aug 28 (Reuters) - Asian shares eked out meagre gains on Wednesday, as higher Wall Street futures provided some relief for investors after an overnight U.S. selloff, though deeper worries about the global economy are likely to keep a lid on sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.03%, Japan's Nikkei .N225 rose 0.04% and Australia's shares rose 0.07%.

The U.S. yield curve inversion deepened on Tuesday to levels not seen since 2007, which sent Wall Street stocks lower. The S&P 500 .SPX fell 0.33%.

Gold, which is bought as a safe haven during times of economic uncertainty, traded close to a six-year high.

"Bonds are rallying and there is limited upside for stocks right now," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

"But I don't want to give up on equities just yet. The U.S. Federal Reserve and officials in other countries simply have to do more to stimulate their economies, which will eventually prevent the bottom from falling out."

U.S. stock futures ESc1 were 0.14% higher, which helped ease investors' nerves in Asian trading, but there were still plenty of reasons to be concerned.

Investors will focus on how Chinese shares open after China late on Tuesday unveiled measures to boost consumption.

A trade dispute between the United States and China is now in its second year and is placing increasing strain on the global economy, forcing policy makers to respond with interest rate cuts and stimulus measures to bolster growth.

A bond yield curve inverts when long-term yields trade below short-term yields and is commonly considered a signal of an impending economic recession.

The yield on benchmark 10-year Treasuries US10YT=RR stood at 1.4744%, compared with the two-year yield US2YT=RR of 1.5159%. The yield curve inversion is the deepest since May 2007, when the U.S. subprime financial crisis started to unfold.

Yields on 30-year Treasuries stood at 1.9554%, below 3-month T-bill yields of 1.9951%, which some traders say is an even more bearish signal.

Spot gold XAU= was unchanged in Asia at $1,542.25 per ounce, but still close to a six-year high. GOL/

The dollar was little changed at 105.67 yen JPY=EBS after falling 0.3% on Tuesday.

Investors are also focused on Sept. 1, when the first stage of U.S. tariffs on $300 billion worth of Chinese goods is scheduled to go into effect. In response, China has unveiled tariffs on U.S. products set to go into effect the same day.

U.S. crude CLc1 ticked up 1.17% to $55.57 a barrel, supported by expectations of a drawdown in U.S. crude inventories. (Editing by Sam Holmes)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.