Stocks Struggle Before US Midterms; Dollar Rises: Markets Wrap

Cornelia Mascio
Novembre 8, 2018

Treasuries climbed, while the pound strengthened ahead of a United Kingdom cabinet meeting. The dollar climbed against most of its major peers, with the pound standing its ground on signs of further progress in Brexit negotiations. Shares in Asia slid following Friday's rally and after White House economic adviser Larry Kudlow downplayed the potential for a quick deal between the USA and China.

Japan's Topix index fell 0.6 per cent as of 11:22am in Tokyo. However, a rally in the banking sector as well as the energy sector pushed up the S&P 500.

Hong Kong's Hang Seng Index fell 1.7 per cent while the Shanghai Composite Index was down 0.2 per cent.

The Bloomberg Dollar Spot Index declined 0.1 percent.The euro advanced 0.1 percent to $1.1417.The Japanese yen fell 0.1 percent to 113.28 per dollar.The British pound added 0.3 percent to $1.3079, the strongest in nearly three weeks.The MSCI Emerging Markets Currency Index was little changed.

Politics loom large for traders as USA congressional elections, seen as a referendum on the policies of President Donald Trump, take place Tuesday.

In the commodities markets, the Bloomberg Commodities Index went up by 0.8%, which is the highest jump in the last one week.

The price of copper went down by 1.5% to trade at $2.7645 per pound. On the Brexit front, Prime Minister Theresa May is due to discuss the latest proposals with her cabinet Tuesday. Investors then turn their eyes to the Federal Reserve, though officials are expected to keep the benchmark interest rate unchanged at their penultimate 2018 meeting Thursday. "As a bond manager, we are quite defensively positioned only because of some news that could come that is very hard to take a big conviction call - whether it's United States midterm elections, how this trade war is going to play out".

Elsewhere, oil extended its decline to a seventh day as the USA defended the temporary waivers given to eight nations to keep buying Iranian crude after American sanctions against the OPEC producer snap back on Monday.

Gold was steady at US$1,232.83 an ounce.

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