Asian shares were poised to open lower on Monday, with the dollar remaining on the back foot after initially dropping in the previous session on U.S. President Donald Trump’s criticism of the Federal Reserve.
Futures pointed to downward moves for markets in Japan and Australia at the market open: Nikkei futures traded in Chicago were lower by 0.65 percent compared to the benchmark’s previous close, and SPI futures in Australia were down 0.29 percent at the end of the last session.
An important focus for markets remains the U.S.-China trade war: Trump told CNBC in a recent interview that he was prepared to impose tariffs on all Chinese imports to the U.S. if he had to. “I’m ready to go to 500,” the president told CNBC’s Joe Kernen in an interview, referring to the $505.5 billion in goods from China the U.S. imported in 2017.
The U.S. and China have already exchanged new tariffs — each hitting $34 billion worth of goods from the other. The Trump administration has also announced a list of proposed duties on $200 billion in Chinese imports, although those tariffs are not yet in effect.
Despite Trump’s recent remarks, stocks stateside finished the Friday session only marginally lower as strong corporate results releases balanced investors’ fear of the trade war and its implications for global economic growth. About 16.4 percent of S&P 500 companies had released their quarterly results as of Friday, with 83 percent of them topping expectations, according to FactSet.
The Dow Jones Industrial Average slipped 0.03 percent, or 6.38 points, to close at 25,058.12, the S&P 500 shed 0.09 percent to end at 2,801.83 and the Nasdaq Composite inched lower by 0.07 percent to 7,820.20.
Meanwhile, Trump doubled down on his criticism of global monetary policy and the Federal Reserve, tweeting that “China, the European Union and others have been manipulating their currencies and interest rates lower.” That, coupled with U.S. interest rate hikes, was making the U.S. lose its competitive edge as the dollar strengthened, Trump claimed.
Trump said in a separate tweet in reference to the Fed that “[t]ightening now hurts all that we have done.” That came after the president told CNBC in an interview that he was “not thrilled” about the central bank hiking interest rates.
The dollar remained broadly weaker on the back of those comments after Friday’s slide. The dollar index, which tracks the greenback against a basket of currencies, was steady at 94.398 after stumbling on Friday.
Against the yen, the dollar traded at 111.36 at 6:51 a.m. HK/SIN, compared to levels around the 112 handle seen last week.
The economic calendar for Monday is relatively light on data (all times in HK/SIN):
- 1:00 p.m.: Singapore June CPI
- U.S. June home sales are due during U.S. hours
— CNBC’s Fred Imbert contributed to this report.
