Asian Stocks Drop; Dollar Gains as Yields Above 3%: Markets Wrap

Bloomberg.com — Stocks in Asia declined Tuesday, while the dollar strengthened and 10-year Treasury yields rose back above the 3 percent mark as investors assessed the outlook for global trade relations and increased tensions in the Middle East.

Equity benchmarks dropped in Hong Kong, Korea and Australia, and were little changed in Japan. Chinese stocks fluctuated after a slew of data showed economic momentum broadly held up. FTSE 100 futures pointed to a lower open as U.S. contracts fell. Treasury yields climbed above 3 percent after dipping below that level earlier and the dollar extended gains against a basket of its Group of 10 peers.

Investor focus returned to trade ahead of a meeting in Washington between U.S. and Chinese officials this week. While President Donald Trump’s move to get China’s beleaguered ZTE Corp. back on its feet provided a sign that he may be open to easing trade tensions, the messages from his administration appear to be mixed. Commerce Secretary Wilbur Ross said the U.S. is exploring alternatives to punish ZTE for breaking sanctions law separately from trade negotiations, a comment that later appeared to be contradicted by Trump.

Elsewhere, oil recovered to around $71 a barrel on reduced supply. The Turkish lira hit its day’s low after President Recep Tayyip Erdogan said he intends to tighten his grip on the economy and take more responsibility for monetary policy if he wins an election next month.