Asian Stock Markets Follow Wall Street Lower Prior to US Fed Release

Daniel Fowler
August 22, 2019

Either way, last year's business investment increase has been less sustainable than Mr. Trump predicted-hurt, at least in the Fed's view, by us and global trade tensions.

After positive signals from US President Donald Trump and some of his top advisers on Monday over progress in the talks with Beijing, and an olive branch with the delay of a ban on Huawei purchases, there have been few developments for traders to buy on. However, policymakers warned that the trade war appears to be a "persistent headwind".

Fed officials also said trade uncertainties were an important factor in the recent drop in fixed business investment in the US, a key factor that Mr. Trump and his economic advisers have pointed to as evidence that the economy is stronger now than under President Obama.

US stocks fell Tuesday after another slide in bond yields and a mixed batch of corporate earnings.

Last year, troubles surrounding Italian politics and the country's financial health led to stock market woes across the world. Investors looked ahead to the Federal Reserve's Wednesday release of notes from its policymaking meeting last month and Powell's Friday speech. But Powell's talk at the central bankers' gathering in Jackson Hole, Wyoming is the key event and will be closely pored over for clues about the bank's plans for next month, with experts unable to agree on whether or not he will announce further cuts. "The US data of late simply does not support the need for an aggressive easing cycle". Hong Kong was flat in the afternoon and Shanghai was barely moved by the close with Tokyo ending down 0.3 percent.

USA stock futures also began to waver after 7:00 a.m. ET, with the S&P 500 mini flat-lining and the Dow 30 contract slipping 6 points. India's Sensex lost 0.6% to 37,114.28. The Federal Reserve, Reserve Bank of New Zealand, Reserve Bank of Australia and soon the European Central Bank are all embarking on a new round of stimulus measures in one form or another.

United States stocks held on to session gains after the minutes were released, with the benchmark S&P 500 Index up about 0.75 per cent on the day. The Dow closed 0.7% lower, while the S&P 500 fell 0.8% and the Nasdaq Composite declined 0.7%.

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While the dollar measure is indeed the highest it's been this year, it is not quite the highest in US history.

Some chipmakers rose on Monday's news that the Trump administration delayed enforcement of export curbs on USA technology sales to Chinese telecom equipment maker Huawei Technologies Ltd.

Last summer, the president noted that business investment was rising at an annual rate of 9%, which he described as a "tremendous increase" that hadn't been seen in "many, many years-decades". Analysts say the concerns that drove that sell-off could resurface at any time.

Benchmark US crude gained 21 cents to $56.34 per barrel in electronic trading on the New York Mercantile Exchange.

West Texas Intermediate crude rose 0.7% to $56.04 a barrel.Gold was steady at $1,502.66 an ounce. Brent crude, used to price worldwide oils, rose 33 cents to $60.36 per barrel in London. The contract advanced 27 cents the previous session to $60.03.

CURRENCY: The dollar rose to 106.51 yen from Tuesday's 106.22. The euro inched up to $1.1105.

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