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ASIA – Stocks in Asia and Europe declined as investors remain wary of the impact of Hong Kong’s protests and of US President Donald Trump’s recent comments on China. Treasury yields and the US equity-index futures also experienced a slump.

Banks were among the most affected on Wednesday. The Stoxx Europe 600 index dipped after a dismal performance from ABN Amro Bank NV. S&P 500 futures also dropped once the underlying gauge shut close to record on Tuesday.

Meanwhile, Hong Kong’s benchmark took a dive as the embattled city saw more protests. The Hang Seng Index (HSI) dropped two percent in the afternoon trading. Local developers and property owners were the most affected, with New World Development dropping 5.3%.

Shares Australia, Japan, and South Korean also had a lukewarm performance. Japan’s Nikkei 225 (N225) went down 0.9%. The KOSPI index also slipped 0.9% while the Shanghai Composite Index (SHCOMP) went down by 0.4%.

US stock futures also retreated, with the Dow (INDU), Nasdaq (COMP), and the S&P 500 (SPX) all sliding down by 0.3%.

The foreign exchange market saw some robust movement. The euro went up 1.1013 while the British pound rose 1.2857. The American dollar was softer while the Swiss franc solidified to 0.9908. Both the Australian and Canadian dollar went a fraction higher. The former is at 0.6845, while the latter stands at 1.3246.

The Japanese yen crept up to 109.07. However, the New Zealand dollar rose sharply to 0.6403 after its central bank surprisingly kept interest rates as is.

With the earnings season tapering off and big central banks seemingly on hold, investors are focusing on trade and gearing up for the purported phase-one deal between powerhouses China and the US.

The notion of a new agreement has seen US stocks trying to rally the past few days, even if the two countries haven’t announced when and where the trade deal will be signed.

News of progress on the US-China front was welcome, even though what Trump shared was not enough. While he admitted to the possibility of a new deal happening, he also left threats of higher tariffs if no agreement is reached.

Trump’s comments about only committing to a deal if it’s favorable to the US has confused traders and investors about the odds of a trade deal pushing through.

Mike McCarthy, CMC Markets’ Chief Market Strategist, voiced his concerns to Reuters and said that “the clock is ticking.” He said markets are expecting to see progress by next week or so. After that, investor confidence will crumble.

 

 

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