Trump government shutdown. Donald Trump has revived a threat to shut down the US government if Congress does not fund his plans to build a wall at the Mexican border. Separately on Friday, the US president denied knowing of his son’s Russian meeting after his former lawyer Michael Cohen reportedly prepared to testify he did.
When America First meets Italy First. US President Donald Trump may not find the ally he expects when he meets with the new Italian prime minister, Giuseppe Conte, in Washington on Monday. The two may agree on immigration and Russia’s inclusion in Nato, but they differ when it comes to military spending and trade.
Move over Faangs. Facebook’s tumble is a reminder that the hot tech stocks known as the Faangs each have a different business model. It is also a signal that it may be time to retire the acronym in favour of Maga— Microsoft, Apple, Google and Amazon.
Hot topic. The 10-year Japanese government bond yield was almost 1 basis point higher at 0.099 per cent as the focus remained on the outcome of the Bank of Japan’s two-day meeting, which began on Monday. The meeting follows a week of speculation that the bank is considering tweaks to its stimulus programmes. That speculation last week saw Japanese bond yields record their biggest jump in two years and forced the central bank to turn to its rarely used intervention strategy twice.
JPMorgan Asset Management global market strategist Yoshinori Shigemi said the central bank faced a dilemma as it remained far from its inflation target despite its use of loose policy to spur growth.
“The lack of pick-up in inflation should mean that the BoJ needs to maintain their policy. Yet this policy also puts pressure on the bond market, banks and financial institutions,” he said. “Shifting away from loose policy could be taken as a tacit admission of defeat, which would then lead to a strengthening Japanese yen and a negative reaction in stock prices.”
Meanwhile, the yield on 10-year US Treasuries rose 1 basis point to 2.96 per cent.
Equities. Asia-Pacific equities were on the back foot following falls for technology stocks on Wall Street on Friday. Japan’s Topix index slipped 0.3 per cent as industrials and technology stocks dropped 0.5 per cent and 0.6 per cent respectively.
Hong Kong’s Hang Seng index was down 0.7 per cent after the technology segment slid 2.6 per cent and financials fell 0.4 per cent.
The Hang Seng China Enterprises index of Hong Kong-listed Chinese companies, reversed earlier gains to be 0.4 per cent lower even as infrastructure stocks gained. In mainland China, the CSI 300 index comprising key Shanghai- and Shenzhen-listed companies was down 0.3 per cent.
In Australia, the S&P/ASX 200 was down 0.4 per cent, pulling back from a 10-year closing high set on Friday. All sectors barring telecommunications fell; the healthcare and technology sectors were down by more than 1 per cent.
South Korea’s Kospi Composite dropped 0.1 per cent as technology stocks fell 1 per cent.
On Wall Street on Friday, the S&P 500 and Nasdaq Composite ended lower as a fall for technology stocks offset share gains stemming from robust US economic growth figures. The Nasdaq shed 1.5 per cent, pulled lower by a 20 per cent fall for Twitter, while the S&P 500 slipped 0.7 per cent.
Forex. In currencies, the dollar index, a measure of the US currency against a basket of peers, was 0.1 per cent higher at 94.724. The Japanese yen was slightly weaker at ¥111.14 to the dollar. For European currencies, the UK pound was hovering at $1.3104 and the euro steady at $1.1653.
China’s currency weakened, with the onshore renminbi, which is permitted to trade 2 per cent either side of a daily midpoint set by the People’s Bank of China, down 0.4 per cent at Rmb6.8340, its lowest point since late June 2017. The offshore renminbi slipped 0.4 per cent to Rmb6.8428.
Commodities. Oil prices diverged, with Brent crude flat at $74.29 a barrel following a decline earlier in the session while US marker West Texas Intermediate rose 0.3 per cent to $68.91 a barrel.