By Bloomberg
ASIAN stocks traded mixed Tuesday as investors pondered concerns about the outlook for global trade and American politics. The dollar held recent gains as 10-year Treasury yields consolidated above 3 percent, and oil traded at a four-year high.
Equities climbed in Japan as traders returned from a holiday, though Chinese shares headed in the opposite direction after a long weekend. Australia was little changed. Hong Kong — where stocks fell Monday on escalating trade tensions — and South Korea are shut Tuesday. Industrial shares led the S&P 500 Index lower after China warned it won’t meet with American officials unless they stop threatening to expand tariffs. Reports that Deputy Attorney General Rod Rosenstein will leave his post also weighed on stocks.
An uptick in political tensions and the escalation in the U.S.-China trade dispute are testing global equities, which have posted two strong weeks of gains in part due to optimism that the global economy can weather any potential tariffs. Coming up this week is the Federal Reserve’s policy meeting, which will likely see interest rates increased for the third time this year and will feature fresh projections for the policy rate over the next few years.
“What will be more interesting will be to find out” the number of rate hikes anticipated for next year, Iain Stealey, portfolio manager at JPMorgan Global Strategic Bond Fund, who expects two Fed rate hikes this year and two in the first half of 2019, said on Bloomberg TV. “Inflation is above target, so they can keep going on this sort of slow normalization. I don’t see them stopping unless we see a pickup in trade rhetoric which actually does impact the overall economy.”
Elsewhere, Brent crude traded above $80 a barrel as OPEC and its allies signaled less urgency to boost output despite U.S. pressure. The pound maintained gains on increasing talk of a second U.K. referendum on the final Brexit deal.
Here are some key events coming up this week:
Japanese Prime Minister Shinzo Abe meets with President Donald Trump in New York to discuss trade. The Fed decision on Wednesday will be followed by a press conference with Chairman Jerome Powell. Thursday sees durable goods, GDP data and jobless claims for the U.S.
These are the main moves in markets:
STOCKS
Japan’s Topix index rose 0.6 percent as of 10:41 a.m. in Tokyo. The Shanghai Composite Index lost 0.6 percent. Australia’s S&P/ASX 200 Index fell 0.3 percent. S&P 500 futures are flat. The underlying measure fell 0.4 percent Monday.
CURRENCIES
The yen fell 0.1 percent to 112.90 per dollar. The offshore yuan held at 6.8612 per dollar. Bloomberg Dollar Spot Index was flat after rising 0.2 percent in each of the past two sessions. The euro was little changed at $1.1752. The British pound traded at $1.3118.
BONDS
The yield on 10-year Treasuries was steady at 3.09 percent, near the highest since May. Australia’s 10-year bond yield climbed about 4 basis points to 2.75 percent.
COMMODITIES
West Texas Intermediate crude was little changed at $72.13 a barrel after jumping 2.2 percent Monday. Gold was flat at $1,198.88 an ounce. LME copper slid 2 percent to $6,227 a metric ton.

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