Asia Stocks Drop as Trade Talks Held; Dollar Slips

Asian stocks declined as investors assessed the implications of ongoing trade talks between the U.S. and China. The dollar remained under pressure ahead of the monthly U.S. jobs report, while the Aussie advanced.

Stocks from Sydney to Hong Kong retreated. The Aussie rose as traders assessed the Reserve Bank of Australia’s decision to edge up core inflation and unemployment forecasts. The 10-year Treasury yield dipped overnight. With Japan closed for a public holiday, Treasuries will remain shut until the London session. U.K. stock index futures climbed, indicating losses from Asia won’t spread to Europe.

Attention now turns to the health of the U.S. economy, with wages growth and jobs data due Friday. The Federal Reserve kept rates on hold as expected earlier this week, admitting inflation is near target without suggesting any need to accelerate its gradual hiking path. U.S. earnings season rolls on with Alibaba reporting pre-market on Friday.

Elsewhere, the trade talks continue between the U.S. and China after both sides dialed back expectations. Argentina’s peso tumbled to a fresh record of 23 per dollar, defying efforts by the central bank which raised interest rates for the second time in a week in an attempt to shore up its currency. West Texas oil held on to gains as traders weighed an increase in stockpiles against concern about U.S. sanctions on Iran.

Some key events coming up during the remainder of this week:

Payroll gains in the U.S. probably picked up in April, with the unemployment rate forecast to drop to 4 percent, according to surveys of economists before the data reports.

Berkshire Hathaway holds its annual shareholders meeting in Omaha, Nebraska on Saturday.

And these are the main moves in markets:

Stocks

The Hang Seng fell 0.8 percent as of 2:02 p.m. in Hong Kong.

Australia’s S&P/ASX 200 Index slid 0.5 percent.

The Shanghai Composite dropped 0.1 percent.

South Korea’s Kospi index lost 0.8 percent.

The S&P 500 futures fell 0.1 percent. The underlying gauge lost 0.2 percent Thursday.

Futures on the U.K.’s FTSE 100 index added 0.5 percent.

Currencies

The Bloomberg Dollar Spot Index stayed depressed after dropping 0.3 percent Thursday.

The euro lost 0.1 percent to $1.1978.

The Aussie advanced 0.3 percent to 75.58 U.S. cents.

The pound bought $1.3571.

The yen gained 0.1 percent, extending Thursday’s advance, to 109.13 per dollar.

Bonds

The yield on 10-year Treasuries decreased two basis points to 2.95 percent on Thursday, the lowest in almost two weeks.

Commodities

West Texas Intermediate crude was little changed at $68.45 a barrel after climbing 0.7 percent.

Gold was flat at $1,312.03 an ounce.

Source: Bloomberg