U.S.-China tension to push Asian shares lower in choppy trade
NEW YORK (Reuters) - Asian shares were set to dip in choppy trade on Friday as worries about worsening U.S.-China ties offset the fillip from hopes massive government stimulus can jump-start the world economy. E-Mini futures for the S&P 500 edged down 0.12% in early Asian trade, while Nikkei futures pointed to a loss of 10 points. Weaker Australian stock futures also indicated a softer open.
NEW YORK (Reuters) - Asian shares were set to dip in choppy trade on Friday as worries about worsening U.S.-China ties offset the fillip from hopes massive government stimulus can jump-start the world economy.
E-Mini futures for the S&P 500
Underscoring the ambivalence in markets, U.S. stocks slid from a near three-month high in a late sell-off overnight, after U.S. President Donald Trump signed an executive order that would weaken laws protecting social media companies, and said he'd hold a news conference about China on Friday. [.N]
In the latest dispute between the world's two biggest economies, the U.S. government has signaled plans to punish Beijing for proceeding with a national security law for Hong Kong that critics fear would erode the city's freedoms.
All eyes are now on Friday's press conference hosted by Trump where he will address his response to China over its treatment of Hong Kong.
It is not clear if Trump will rescind some, none, or all of the U.S. economic privileges that Hong Kong enjoys under U.S. law. Larry Kudlow, Trump's top economic adviser, said on Thursday Hong Kong may now need to be treated like China on trade and other financial matters, which could have implications for tariffs and stock market listings.
"Risk appetite quickly disappeared after President Trump announced he would address China tomorrow at a press conference. It didn’t take much to help traders rush to exits," Edward Moya, a senior market analyst at currency trader Oanda, wrote in a note.
If tensions between China and the United States intensify, a build-up of short positions in the S&P 500 index, or bets that the index will fall, could spark a sell-off in shares, Moya added.
Stock markets have rebounded from lows hit in mid-March on hopes that enormous government stimulus could help the world economy recover more quickly than expected from the coronavirus shutdown. Some analysts have warned, however, that such optimism is misplaced given the extent of economic devastation.
Indeed, the latest U.S. data showed the economy may be stabilising, but at a much lower level.
Figures released overnight showed the number of Americans seeking jobless benefits fell for an eighth straight week last week, but claims remained astonishingly high.
In a sign investors are undecided about how much risk to take on, prices for safe-haven gold rose, even as the U.S. dollar and Japanese yen -- in demand when investors shy from risk -- softened.
The dollar index <=USD> slipped 0.4% to 98.51, held back in part by a stronger euro
The euro was firm at $1.1073 against the dollar, near a two-month high of $1.1087, while the yen edged down 0.07% to 107.07 on the dollar.
U.S. Treasury yields were steady after inching higher overnight as gains in stocks softened demand for bonds. Benchmark 10-year yields held at 0.7050%.
Oil prices gave up some of their gains overnight, as concerns that Trump could impose sanctions on China over Hong Kong and a surprise build in inventories overshadowed a steady improvement in U.S. refining activity. [O/R]
In early Friday trade, U.S. West Texas Intermediate crude
(Reporting by Koh Gui Qing; Editing by Sam Holmes)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.