Stocks Climb as Yuan Losses Ease; Dollar Declines: Markets Wrap

Bloomberg.com — Stocks in Asia reversed losses and the yuan recovered its drop amid signs of intervention from Chinese authorities looking to stem the currency’s weakness.

Shares in China and Hong Kong climbed and the offshore yuan pared the slide that pushed it to its weakest in more than a year against the greenback, as traders said a major Chinese bank was seen making large offers to sell dollars. Equities also climbed in India and Australia, while Japan shares slipped. U.S. and U.K. stock-index futures pointed to a muted start to trading in London and New York. The dollar slipped and Treasury yields ticked higher.

Chinese assets are in focus after the central bank Friday weakened its daily reference rate for the currency by the most in two years. The yuan initially fell beyond 6.8 per dollar, then rallied amid speculation of intervention. The suggestion that China’s policy makers are comfortable with depreciation has stoked a debate about the implications for global markets, with the example of the turmoil of 2015 looming in investor memories.

Earlier, the dollar fell, triggered by President Donald Trump saying he wasn’t thrilled at the Federal Reserve increasing interest rates, raising the specter of political interference with the U.S. central bank. Meantime, earnings season is in full swing, with a mixed picture so far doing enough to propel U.S. equities back toward the all-time high reached in January.

Elsewhere, copper gained after Thursday’s slide. West Texas Intermediate crude rose above $69 a barrel.