Stocks in Asia were poised to trade lower on Wednesday amid dampened expectations for a resolution to the U.S.-China trade war. Meanwhile, investors await the U.S. Federal Reserve’s announcement of its decision on interest rates, set to happen later stateside.
Futures pointed to a lower open for Japanese shares. The Nikkei futures contract in Chicago was at 21,505, while its counterpart in Osaka was at 21,480. The Nikkei 225 last closed at 21,709.31.
Stocks in Australia were also set to see opening declines, following Tuesday’s record close. The SPI futures contract was at 6,755.0, as compared to the S&P/ASX 200’s last close at 6,845.10.
China is set to release its official manufacturing Purchasing Managers’ Index for July at 9:00 a.m. HK/SIN.
Australian inflation data for the month of June is also set to be released later on Wednesday at 9:30 a.m. HK/SIN.
Asia-Pacific Market Indexes Chart
Overnight on Wall Street, the Dow Jones Industrial Average closed 23.33 points lower at 27,198.02, while the S&P 500 shed 0.3% to end its trading day at 3,013.18. The Nasdaq Composite declined 0.2% to close at 8,273.61.
The moves downward came as U.S. President Donald Trump said in a series of tweets Tuesday that China is not keeping its promise of buying more U.S. agricultural products. For its part, China insists that it has bought U.S. agricultural products.
Trump’s comments come as U.S.-China trade talks are happening in Shanghai from July 30-31, as the two economic powerhouses aim to reach a deal to end a protracted trade war that has seen both parties slap tariffs on billions of dollars worth of each other’s goods.
Meanwhile, the Fed is set to deliver its decision on interest rates later Wednesday stateside, with expectations that it will cut interest rates by a quarter point. Investors will also look for clues from Powell about potential rate cuts later this year. Currently, traders are pricing in at least two rate cuts of 25 basis points before the end of the year, according to the CME Group’s FedWatch tool.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.050 after slipping from levels above 98.1 yesterday.
The Japanese yen, often seen as a safe-haven currency, traded at 108.59 against the dollar after strengthening from levels above 108.8 in the previous session. The Australian dollar changed hands at $0.6874 after slipping from the $0.690 handle yesterday.
Here’s a look at what’s ahead today:
- China: Official Purchasing Managers’ Index for July at 9:00 a.m HK/SIN
- Australia: Consumer Price Index for June at 9:30 a.m. HK/SIN
- Japan: Consumer confidence for July at 1:00 p.m. HK/SIN
- South Korea earnings: Samsung Electronics
- Japan earnings: Nomura, Mizuho Financial, Mitsubishi UFJ Financial Group, Daiwa Securities, Mitsui, Panasonic
— CNBC’s Fred Imbert contributed to this report.
