Yen Edges Up Amid U.S. Protests, China Tension: Markets Wrap

(Bloomberg) — Stocks in Asia looked set for a mixed start as investors weighed the simmering U.S.-China tensions against violent protests in some American cities that may threaten the economic recovery. The yen edged up.

With Amazon scaling back deliveries and Apple closing some stores Sunday, investors are trying to estimate how the violence over the weekend will impact the reopening of the world’s largest economy. Currency markets showed an initially muted reaction, though focus will be on the opening of U.S. equity futures. Meantime, President Donald Trump’s long-touted response to China for its crackdown on Hong Kong included a barrage of criticism but stopped short of fully escalating tensions between the two nations. The S&P 500 ended higher on Friday, when futures in Japan and Hong Kong climbed.

Traders on Monday will also take stock of a slew of manufacturing PMIs due, including from South Korea and Taiwan, after Chinese data over the weekend showed a continued bumpy recovery. The demonstrations in the U.S. could add another layer of complexity to assessing the economic reopening after the rally in global equities from the March lows left some to conclude the gains are running out of steam.

“The reopening could be disrupted and that can affect local state economies that just began to emerge from the pandemic,” said Ben Emons, managing director for global macro strategy at Medley Global Advisors.

Here are some key events coming up:

Australia’s central bank is expected to keep its main policy programs unchanged on Tuesday. So too is the case for Canada, which has options to add stimulus but will probably stand pat on Wednesday to allow more time to evaluate the progress of policy action.In Europe, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases. Anything less than an expansion at Thursday’s meeting would be a big shock, Bloomberg Economics said.The U.S. labor market report on Friday will probably show American unemployment soared to 19.6% in May, the highest since the 1930s.

These are the main moves in markets:

Stocks

The S&P 500 Index climbed 0.5% on Friday.Futures on Japan’s Nikkei 225 rose 1.1% on Friday, when Hang Seng futures advanced 0.6%. Futures on Australia’s S&P/ASX 200 Index slid 0.4%.

Currencies

The yen rose 0.1% to 107.69 per dollar.The euro bought $1.1119, up 0.2%.The offshore yuan was steady at 7.1361 per dollar.The Australian dollar slid 0.1% to 66.58 U.S. cents.

Bonds

The yield on 10-year Treasuries fell four basis points to 0.65% on Friday.

Commodities

West Texas Intermediate crude gained 5.3% to $35.49 a barrel on Friday.Gold closed at $1,730.27 on Friday.

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