Asian stocks fell with U.S. equity futures after the latest tariffs kicked in on Chinese goods and data showed further weakness in China’s manufacturing sector. The yen edged higher and the yuan retreated.
Japan and Hong Kong saw modest stock declines, while Chinese shares were little changed. S&P 500 futures dropped 1% before paring losses, and Treasury contracts advanced. President Donald Trump’s tariffs on $110 billion in Chinese imports came into effect on Sunday, as did retaliatory levies by China. Cash Treasuries won’t trade and U.S. equity markets will be shut for the Labor Day holiday. The dollar was steady.
Investors are still reeling from a volatile August that saw a collapse in Treasury yields and declines for global equities. A drop in the official China purchasing managers’ index on Saturday highlighted the pressure facing the world’s second-largest economy from weaker demand and escalating trade tensions with the U.S.
“There is a long way to go,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. in Sydney. “Share markets may still have to fall further to pressure Trump to resolve the issue.”
Elsewhere, Argentina’s government is imposing currency controls to halt the flight of dollars out of the country as it teeters on the brink of default. In the U.K., Boris Johnson all but sounded the election gun and told lawmakers from his party to back his Brexit plan or risk having to find another party.
Here are some key events coming up:
Australia sets monetary policy on Tuesday.Fed speakers include New York Fed’s John Williams on Wednesday and Fed chair Jerome Powell on Friday.The U.S. jobs report on Friday is projected to show nonfarm payrolls rose by 165,000 in August, slightly above the month prior. Estimates of the employment situation are for unemployment to be steady at 3.7% and the average hourly earnings rate of increase to slow to 3.0%.
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index dropped 0.4%. The underlying gauge added 0.1% on Friday.Japan’s Topix index fell 0.4%.South Korea’s Kospi declined 0.3%.Hong Kong’s Hang Seng slid 0.3%.The Shanghai Composite was little changed.Australia’s S&P/ASX 200 Index slid 0.1%.
Currencies
The yen rose 0.1% to 106.18 per dollar as of 10:30 a.m. in Tokyo.The offshore yuan slipped 0.1% to 7.1715 per dollar.The euro added 0.1% to $1.0990.The kiwi sank 0.5% to 62.95 U.S. cents.The Bloomberg Dollar Spot Index was flat.The British pound was steady at $1.2159.
Bonds
Futures on 10-year Treasuries advanced about 0.2%. The yield on 10-year Treasuries gained less than one basis point to 1.50% on Friday.Australia’s 10-year yield added one basis point to 0.90%.
Commodities
West Texas Intermediate crude fell 0.2% to $54.97 a barrel.Gold rose 0.3% to $1,525.48 an ounce.
