Stocks, Futures Dip Before Trump Speaks on China

Stocks slipped and U.S. futures edged lower on Friday as President Donald Trump’s planned press conference on China threatened to further stoke tensions between the world’s two largest economies. Treasuries gained along with most European bonds.

The Stoxx 600 Index fell for the first time in five days, dragged lower by travel shares and automakers, as deteriorating Sino-American ties cast a cloud over a global stock rally spurred by reopening economies. Contracts on the main U.S. equity benchmarks nudged lower after Trump told reporters he would announce what the administration would do “with respect to China,” following Beijing’s moves to enact a law that may curb freedoms in Hong Kong.

Stocks in Shanghai were little changed, while the offshore yuan was steady. Hong Kong equities were among the region’s biggest decliners. Crude oil trimmed its biggest monthly advance on record, while the dollar weakened for a second straight day.

Global stocks have mostly shrugged off escalating tensions between Washington and Beijing, but Trump’s planned press conference appears to have spooked investors. It comes amid growing stimulus from governments and easing lockdown measures in the wake of the coronavirus. The White House didn’t immediately specify a time. Meanwhile, clues on the next stages for Federal Reserve policy may also come Friday, when Chairman Jerome Powell participates in a virtual discussion.

Stocks

Futures on the S&P 500 Index declined 0.4% as of 8:08 a.m. London time.The Stoxx Europe 600 Index sank 0.9%.The MSCI Asia Pacific Index dipped 0.3%.The MSCI Emerging Market Index was little changed.

Currencies

The Bloomberg Dollar Spot Index fell 0.3%.The euro gained 0.2% to $1.1104.The British pound increased 0.2% to $1.2347.The onshore yuan weakened 0.1% to 7.149 per dollar.The Japanese yen strengthened 0.5% to 107.14 per dollar.

Bonds

The yield on 10-year Treasuries sank three basis points to 0.66%.The yield on two-year Treasuries sank one basis point to 0.16%.Germany’s 10-year yield declined two basis points to -0.44%.Britain’s 10-year yield declined two basis points to 0.186%.Japan’s 10-year yield climbed one basis point to 0.009%.

Commodities

West Texas Intermediate crude declined 1.9% to $33.06 a barrel.Brent crude dipped 1% to $34.94 a barrel.Gold strengthened 0.1% to $1,719.53 an ounce.

Stocks, Futures Dip Before Trump Speaks on China, Bloomberg, May 29