Stock Futures Mixed in Asia; Treasuries Decline

(Nov 6): Stocks in Asia looked set for a muted start Wednesday after a gauge of the American services sector showed signs of improvement, offsetting conflicting news flow on the U.S.-China trade discussions. The dollar climbed and Treasuries declined.

Futures in Japan and Hong Kong signaled a flat start, while Australian contracts rose modestly. Treasury yields climbed to the highest since mid-September. News that U.S. service industries expanded more than forecast in October triggered a brief equity rally, but pushed market pricing for another rate cut from the Federal Reserve further out. The S&P 500 Index closed marginally lower.

In the latest trade news, China is reviewing locations in the U.S. where President Xi Jinping would be willing to meet with President Donald Trump to sign a pact, people familiar with the plans said. China is seeking the U.S. roll back tariffs before Xi agrees to take the politically sensitive step of heading to the U.S. to ink a deal. Meantime, traders continued to wind down expectations for monetary easing in the U.S. as the latest read on non-manufacturing offered some comfort against a backdrop of fragile global economic growth.

“It seems like the worries in the manufacturing sector are not spilling over, at least to a critical degree, into the services sector,” Yelena Shulyatyeva, senior U.S. economist at Bloomberg Economics, told Bloomberg TV.

Elsewhere, oil climbed amid enthusiasm on the trade front. Gold sank more than 1.5%.

Here are some key events coming up this week:

Earnings are due from companies including: SoftBank and BMW on Wednesday; Walt Disney, Toyota, Deutsche Telekom on Thursday.
Regional Federal Reserve presidents including Charles Evans, John Williams and Patrick Harker speak at events on Wednesday.
A Bank of England monetary decision is due Thursday.
The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday.

These are the main moves in markets:
Stocks

The S&P 500 dipped 0.1% on Tuesday.
Futures on Japan’s Nikkei 225 added 0.1%.
Hang Seng Index futures earlier rose 0.1%.
Futures on Australia’s S&P/ASX 200 Index gained 0.3%.

Currencies

The yen was at 109.13 per dollar, after sliding 0.5%.
The offshore yuan was at 7.0004 per dollar after a 0.5% advance.
The Bloomberg Dollar Spot Index rose 0.2%.
The euro bought $1.1074.

Bonds

The yield on 10-year Treasuries rose seven basis points to 1.85%.

Commodities

West Texas Intermediate crude oil advanced 1.2% to $57.22 a barrel.
Gold retreated 1.7% to $1,484.97 an ounce. – Bloomberg

Source: TheEdgeMarkets