Asian stocks trade mixed as traders await midterms

Irving Hamilton
November 8, 2018

Asian stocks fell on Monday (Nov 5) after a reversal in U.S. equities on Friday, amid concern over whether trade tensions with China can be mended. Oil fell for a sixth straight day. Shares in Asia fell following Friday's rally and after White House economic adviser Larry Kudlow downplayed the potential for a quick trade deal between the USA and China.

The S&P 500 Index rose 0.4 percent as of 10:26 a.m.

Politics, geopolitics and central banks will be the focus of the week for investors with the United States midterm elections likely to dominate coverage early on, seen as a referendum on the policies of President Donald Trump. USA congressional elections, seen as a referendum on the policies of President Donald Trump, loom large on Tuesday. Up ahead is the Federal Reserve policy meeting Thursday, when officials are expected to keep the benchmark rate unchanged but give clues for moves into 2019.

Britain's FTSE 100 was flat, however, as the pound strengthened on a report Britain and the EU were advancing towards a deal that would give financial services firms in the United Kingdom continued access to European markets once Brexit happens. The pound strengthened a third day in four on signs of further progress in Brexit negotiations. The STOXX Europe 600 Index remained in the green despite rather thin trading today.

Elsewhere, crude climbed as sanctions on Iran oil snapped back into place Monday.

"It is worth noting that such a sharp month of (equity) outflows - a rare occurrence - tends to be a buying opportunity", the Institute of International Finance (IIF) said in a note, referring to emerging markets in the October exodus.

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The Bloomberg Dollar Spot Index slipped 0.1 percent.

Attorney General Jeff Sessions submits resignation in letter to President Donald Trump
Mr Sessions announced his resignation in a letter to Mr Trump , saying the resignation came at "your request". In this July 13, 2018 photo, Attorney General Jeff Sessions delivers remarks in Portland, Maine.

The MSCI Emerging Market Index declined 0.4 percent, the first retreat in a week.

Government bonds in Europe and the US were mixed, but mostly little changed.

The price of copper went down by 1.5% to trade at $2.7645 per pound.

The British pound jumped 0.6 percent to $1.3041.

The yield on 10-year Treasuries was little changed at 3.2 percent.Germany's 10-year yield was little changed at 0.43 percent.Britain's 10-year yield rose three basis points to 1.53 percent.

The major US averages pushed higher, but trading on the Dow Jones Industrial Average was about 18 percent below average.

The Australian dollar and the Kiwi dollar were up 1.4 percent and 1.7 percent respectively after strong domestic trade data helped offset some of the concerns about slowing growth in China - Australia's biggest trading partner.

-With assistance from Harry Suhartono, Vildana Hajric, Andreea Papuc, Srinivasan Sivabalan, Christopher Anstey, Samuel Potter and Eddie van der Walt.

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