On Thursday, the early signs of the U.S.-China trade war hurt corporate earnings. Wall Street stocks plunged, and Asian share markets weakened.
The signs further helped reinforce robust demand for safe-haven U.S. Treasuries.
The most significant one-day decrease in four months were MSCI’s broadest index of Asia-Pacific shares outside Japan, 0.3%, and Tokyo’s benchmark Nikkei 2.0%.
The benchmark Shanghai Composite and the blue-chip CSI 300 gliding 0.8% and 0.7% with Hong Kong’s Hang Seng declining 0.6%.
For the first time after three years, when the Bank of Korea suddenly cut its policy interest rate, South Korea’s market weakened 0.4%.
In addition, adding to the anxiety about the economy’s outlook are uncertainties from a trade dispute with Japan.
European stocks also opened lower. Futures for Britain’s FTSE tumble 0.4%, Germany’s DAX falling 1.0% and France’s CAC dips 0.5%.
On Wednesday, all three major indexes plunged in Wall Street. The trade-related CSX Corp weak results strengthened concerns.
In addition, the protracted trade deadlock between the United States and China could hurt U.S. corporate earnings.
Earlier in the week, U.S. President Donald Trump continues to pressure Beijing with a threat to put tariffs on another $325 billion of Chinese goods.
The threat was due to the current stock market nervousness of when will the face-to-face talks will resume.
Improvement of Sino-US Trade Talks
The news report showed a delay in the progress towards a U.S.-China trade deal.
Meanwhile, the demands of Beijing and the easing of restrictions on Huawei Technologies are being determined by the Trump administration.
Netflix Inc shares fell in the after-market trade, for the first time in eight years.
The world’s dominant subscription video service worries for it has missed targets for new subscribers overseas.
The fears about the U.S.-China trade war increased the demand for safe-haven debt and data showing the weakness in the U.S. housing market dropped treasury yields.
Yields on 10-year and 30-year benchmark bonds scaled to 2.06% and 2.57%, individually, above the seven basis points.
The benchmark bonds closed at 2.04% and 2.56%, in that order.
The U.S. home building fell for the second straight month, and a possible sign of trouble will be faced ahead for the housing market as it has been declining for two years.
Meanwhile, in the foreign exchange market, as broader risk aversion pushed benchmark U.S. yields to a nine-day low, the dollar slipped on Thursday.
The current stock market displayed the dollar index versus a basket of six major currencies decreased by 0.2% at 97.08.
The euro increased to uncertain gains at 0.1% to $1.124. The single currency’s gains were limited as it was controlled by the prospects of easing from European Central Bank as early as next week.
On July 3, the dollar was 0.3% down at 107.62 yen being its weakest level.
On Wednesday, The International Monetary Fund said the dollar was overvalued by 6% to 12%, based on near-term economic fundamentals.
Since April 2017, amid growing risks of Britain’s exit at the European Union with a no-deal Brexit, sterling drops to $1.238 being its lowest.
But on Wednesday, sterling was higher at $1.244.