Asian stocks struggled for traction Monday with energy shares tumbling after oil extended its biggest drop in about a year. The euro rallied after Italy’s president rejected a candidate for finance minister who’s been skeptical of the single currency.
Benchmarks dipped in Tokyo and Australia. South Korean stocks rose, as did U.S. futures, after President Donald Trump appeared to confirm that his June summit with North Korea’s Kim Jong Un was back on. Hong Kong stocks advanced. The MSCI Asia Pacific Energy Index had the biggest decline after a Saudi minister said petroleum supply would likely rise in the second half. Oil slid further below $70 a barrel in New York while the dollar slipped against most major peers.
Trading may be subdued round the world by U.S. and U.K. holidays Monday.
Investors turn their attention to the economy this week with readings on European inflation, Chinese manufacturing and Friday’s U.S. jobs report, the last before Federal Reserve policy makers meet in June. Italian assets will be in focus after that country sank deeper into political uncertainty, with populist leaders failing in their attempt to form a government.
“We may now be in for an extended period of heightened uncertainty ahead of fresh elections – assuming that’s where we’re headed – but that’s not a story for today,” said Ray Attrill, head of foreign-exchange strategy at National Australia Bank Ltd. in Sydney, referring to the euro’s advance on Monday. “For now it’s more relief that Italy will not — for now at least — have an avowed euro-skeptic finance minister.”
Elsewhere, the Indonesian rupiah climbed amid speculation of another interest rate hike by the central bank, while the nation’s sovereign bonds also rallied, with the 10-year yield sliding 20 basis points. — Bloomberg
