Asian equities were mixed Tuesday as investors assess whether corporate earnings can deliver on high expectations against a backdrop of trade tensions. Treasuries and the dollar were steady ahead of testimony from Federal Reserve Chairman Jerome Powell.
Japanese stocks outperformed in the region as the yen slipped, while the steepest declines were in China and Hong Kong as evidence mounts of a slowdown in the Chinese economy. The yen was trading near its lowest since January. Commodities sank overnight, with West Texas Intermediate oil slumping more than 4 percent. Disappointing subscriber growth at Netflix Inc. sent its shares plunging and dragged Nasdaq futures down in the final hour of the U.S. session.
The escalation in U.S.-China trade tensions could weaken economic growth and upend the current market-friendly backdrop of low volatility in equities and rates, the International Monetary Fund and BlackRock Inc. Chief Executive Officer Larry Fink warned. Stock investors are assessing whether prices justify what’s being delivered from companies as the earnings season ramps up. It’s been a mixed bag so far and Goldman Sachs Group Inc. is up next.
Elsewhere, oil consolidated near a three-week low around $68 a barrel, as global trade anxiety combined with an offer from Saudi Arabia to add more crude on top of its contractual supplies to some buyers in Asia to boost market volatility.
The New Zealand dollar jumped after the central bank’s core inflation measure accelerated at the fastest pace in seven years. Australian dollar rose after the Reserve Bank of Australia said it expects a strengthening economy to gradually cut unemployment and lift inflation.
These are some key events coming up this week:
Earnings season continues with reports due from companies including: Goldman Sachs, Morgan Stanley, American Express, Microsoft, Taiwan Semiconductor Manufacturing, Unilever, Johnson & Johnson and IBM. Fed’s Powell delivers the semi-annual Monetary Policy Report to a Senate committee Tuesday and a House panel on Wednesday, and will answer lawmakers’ questions.
These are the main moves in markets:
Stocks
Japan’s Topix index rose 1.1 percent as of 2:15 p.m. in Tokyo. Australia’s S&P/ASX 200 declined 0.6 percent. South Korea’s Kospi index was little changed. Hong Kong’s Hang Seng Index slid 1 percent and a gauge of Chinese stocks traded in the city slid 1.1 percent. The Shanghai Composite Index declined 1 percent. S&P 500 Index futures were little changed. The S&P 500 Index fell 0.1 percent Monday.
Currencies
The yen lost 0.1 percent to 112.40 per dollar. The offshore yuan rose 0.2 percent to 6.6894 per dollar. The euro was steady at $1.1715. The British pound bought $1.3243.
Bonds
The yield on 10-year Treasuries added one basis point to 2.87 percent after gaining three basis points Monday. Australia’s 10-year bond yield rose two basis point to 2.66 percent.
Commodities
West Texas Intermediate crude was little changed at $68 a barrel after dropping 4.2 percent Monday. Gold traded at $1,241.31 an ounce. — Bloomberg

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