Asia: Stocks mixed amid trade war caution; yen climbs

[SYDNEY] Stocks in Asia kicked off the week on a cautious note as the trade-war showed no signs of letting up. The yen advanced along with Treasury futures.

Futures on the S&P 500 Index were lower in early trading and shares opened down in Sydney, while those in Seoul edged higher. Trading may be limited in much of the Asia-Pacific region with markets shut on Monday in Japan, Singapore, India, Malaysia, Philippines and Thailand. The yen nudged up, extending moves seen at the end of last week as US President Donald Trump said that planned trade talks with China could be called off. Oil dipped.

A volatile start to August for global markets has seen bond traders lift expectations for central-bank easing. The People's Bank of China late Friday called for a "rational" view on current headwinds, and former central bankers warned that the confrontation with the US is deepening. Mr Trump said Friday that it would be "fine" if US-China negotiations planned for next month were called off, adding that he's "not ready to make a deal".

"We remain cautious, as we believe that a number of challenges remain," said Andrew Sheets, chief cross asset strategist at Morgan Stanley in London. "Among them, the risk that high policy expectations make disappointment more likely, and that even if those aggressive expectations are met, easing isn't expected to improve growth or inflation materially."

Companies releasing results include Barrick Gold, China's Tencent, JD.com and Alibaba, Cisco, Brazilian utility Eletrobras, Prudential, Australia's Telstra, giant retailer Walmart, Nvidia, Swisscom and the Danish brewer Carlsberg.

The US consumer price index, out Tuesday, probably picked up to a 1.7 per cent annual pace in July, according to economist estimates. Core prices, which exclude food and energy, are seen rising 2.1 per cent, about in line with most readings this year.

Wednesday brings data on China retail sales, industrial production and the jobless rate.

Thursday sees the release of US jobless claims, industrial production and retail sales data.

Australia jobs data is out Thursday.

Stocks

The MSCI Asia Pacific Excluding Japan Index slid 0.1 per cent as of 8.05am in Hong Kong.

Australia's S&P/ASX 200 Index lost 0.1 per cent.

South Korea's Kospi index added 0.2 per cent.

Futures on the S&P 500 dipped 0.1 per cent. The underlying gauge dropped 0.7 per cent on Friday.

Currencies

The yen rose 0.3 per cent to 105.42 per US dollar.

The offshore yuan was little changed at 7.1023 per US dollar.

The Bloomberg Dollar Spot Index was little changed.

The euro was at US$1.1207, up 0.1 per cent.

Bonds

The yield on 10-year Treasuries ended last week at 1.74 per cent, up two basis points. Cash Treasuries won't trade until the London open due to the Japan holiday. Futures were up 0.1 per cent to 129-24.

Australia's 10-year bond yield rose one basis point to 0.97 per cent.

Commodities

Gold gained 0.2 per cent to US$1,499.79 an ounce.

West Texas crude slipped 0.5 per cent to US$54.22 a barrel.

BLOOMBERG