Futures tip subdued open for Asian shares after US rally loses steam

FAN Editor

Asian shares looked set for a subdued open on Tuesday after an overnight rally on Wall Street lost steam.

U.S. stock indexes rose on Monday, but finished the day well off session highs following a report that FBI officers had raided the office of Michael Cohen, President Donald Trump’s longtime personal lawyer.

The Dow Jones industrial average closed up 0.19 percent, or 46.34 points, at 23,979.10, the S&P 500 advanced 0.33 percent to 2,613.16 and the Nasdaq composite gained 0.51 percent to end at 6,950.34.

Stocks had rallied earlier in the session after recent U.S.-China trade tensions appeared to ease following a week largely dominated by trade-related developments.

Treasury Secretary Steve Mnuchin said Sunday he didn’t expect a trade war to take place. Trump said in a tweet on the same day he expected China would remove its trade barriers, adding that the U.S. and China had a “[g]reat future” ahead.

On Monday, however, Trump criticized China in a separate tweet for what he called “STUPID TRADE.”

White House economic advisor Larry Kudlow told CNBC on Monday that Trump was merely responding to “decades of misdeeds by China [on] trade,” but said he didn’t know if tariffs would ultimately be implemented.

Ahead, Chinese President Xi Jinping’s scheduled speech at the Boao Forum for Asia later in the day will be closely watched for Beijing’s response to the recent escalation in U.S.-Chinatrade tensions. Investors will also be on the lookout for potential announcements on market reforms.

Over in Asia, futures pointed to a relatively steady open for markets on Tuesday. Nikkei futures traded in Chicago were off by 0.18 percent at 21,640 compared to the benchmark’s last close. Meanwhile, Australian SPI futures were last flat.

Markets in the region mostly advanced on Monday as trade fears faded slightly in the last session, although Japan’s Nikkei 225 and China’s Shanghai composite still finished in correction territory.

Against the yen, the dollar slipped to trade at 106.75 by 6:55 a.m. HK/SIN after trading above the 107 handle during Asia afternoon trade on Monday. Meanwhile, the dollar index stood at 89.838 at the end of Monday.

Here’s the economic calendar for Tuesday (all times in HK/SIN):

  • 7:50 a.m.: Japan core machinery orders
  • 9:30 a.m.: Australia NAB business confidence survey
  • 2:00 p.m.: Japan machine tool orders
  • 3:00 p.m.: China M2 money supply

Disclosure: Larry Kudlow is a former CNBC contributor.

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