SINGAPORE (Reuters) – On Thursday, stocks had a mixed day, but the dollar took a hit as earlier excitement started to wane.
US Treasury yields climbed, with the benchmark 10-year yield reaching a month-high, largely due to worries over President Trump’s budget plan that significantly adds to the US debt.
This week began on a positive note for investors with promising news regarding the US-China trade war and several investment deals from the Middle East during Trump’s visit, creating a sense of optimism in a challenging global environment.
However, by Thursday, that optimism had dissipated, leaving no significant changes in the MSCI’s broadest index for Asia-Pacific stocks, excluding Japan. After a slight uptick in profits during the overnight session, Wall Street futures dipped a bit.
“It feels like we were at a big party, and now we’re just recovering, waiting for the next one,” commented Tony Sycamore, a market analyst at IG.
While the US-China trade agreement initially uplifted the markets, Trump’s unclear trade policies are leaving many uncertain about future global economic conditions.
Investors are also holding back, looking for more clarity on trade agreements with other nations.
“I’m hesitant to push the market any higher from here,” Sycamore added.
He expressed doubts that foreign investors would quickly increase their positions in US stocks, as recent tariffs and legislative actions have undermined their confidence.
NASDAQ futures were down 0.02%, while S&P 500 futures fell 0.13%. EuroStoxx 50 futures dipped 0.09%, though FTSE futures rose slightly by 0.08%.
In Japan, the Nikkei index dropped by 0.9%. The CSI300 blue chip index in China decreased by 0.23%, while Hong Kong’s Hang Seng index remained mostly unchanged.
Investors are now looking forward to upcoming US retail sales data and Walmart’s earnings report, as these could signal trends in the world’s largest economy.
This uncertainty may heighten fears of a recession.
Additionally, Federal Reserve Chairman Jerome Powell is set to speak later, and market watchers will be listening closely for hints regarding US monetary policy.
In foreign exchange, the dollar struggled to maintain its earlier gains, falling 0.44% against the yen and 0.3% against the Swiss franc, trading at 146.13 and 0.8397 respectively.
South Korea has faced continued disruptions after discussions between its Deputy Finance Minister and a US Treasury Department representative about the dollar/won market.
Despite soothing reports that Washington isn’t seeking a weaker dollar in current talks, investor concerns about the potential strategy persist.
Wong’s recent activities mirrored a notable rise in the Taiwanese dollar earlier this month.
The dollar slid about 0.5% against the won, trading at 1,400.70.
Goldman Sachs analysts noted that the ongoing discussions raise questions about how undervalued trade-surplus currencies are affected by a weaker dollar scenario.
The Australian dollar rose after a report indicating that April employment figures exceeded expectations, gaining 0.3% to $0.6448.
Meanwhile, oil prices dropped amid speculation surrounding a potential US-Iran nuclear deal, compounded by unexpected increases in US crude stockpiles, which are concerning investors.
Brent crude futures decreased by 1.8% per barrel to $64.93, while US crude fell by 1.9% to $61.95 per barrel.
The price of spot gold remained stable at $3,179 per ounce.
