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All eyes on US as dollar edges up and futures gain
THE dollar edged higher on Wednesday and US equity futures advanced as global investors waited to see if there will be further turmoil in American markets when they reopen following the Christmas break. Gold added to this month's gains while the yen slipped.
With European markets still shut, all eyes were on US assets for clues as to whether there will be any let-up in the sell-off that's put the S&P 500 Index on the cusp of a bear market.
Contracts on the gauge slumped earlier after CNN reported President Donald Trump was growing frustrated with Treasury Secretary Steven Mnuchin, but they went on to rebound as the day wore on.
The greenback was slightly stronger versus its major peers though remained in a tight range.
It's been one of the most miserable Decembers on record for equity investors, as a host of headwinds combined to drag down America's benchmark index.
Year end and the Christmas break have arrived just as fears of a global slowdown and personnel churn in the US administration sap confidence.
In the latest instalment of America's policy-making saga, investors are weighing Mr Trump's expressions of confidence in Mr Mnuchin, the Federal Reserve and US economy against the CNN report that the Treasury chief could be in "serious jeopardy". "These are incredibly tricky markets to decipher, as the outsized moves are not reflective of the current US economic landscape," said Stephen Innes, head of Asia-Pacific trading at Oanda Corp in Singapore. "But that seems to matter little so far, as fear mongering continues to permeate every pocket of global capital markets."
Elsewhere on Wednesday, Treasuries swung from a loss to a gain and back, though moves were contained. Japanese equities closed higher on a wave of late buying after fluctuating throughout the day.
Korean shares tumbled after a holiday, and Shanghai stocks fell for a second day.
Markets in Australia and Hong Kong were closed.
West Texas Intermediate crude rebounded to above US$43 a barrel.
The offshore yuan was little changed after China released new rules promising to treat all companies equally, the latest positive step on the trade and investment front since US and Chinese tariff hikes were set on pause.
In the currencies market, the euro fell 0.1 per cent to US$1.138.
The British pound gained less than 0.05 per cent to US$1.2676.
The Japanese yen decreased 0.3 per cent to 110.64 per dollar, the first retreat in almost two weeks and the biggest dip in more than two weeks. BLOOMBERG