(Bloomberg) — European equities are set to mimic a lackluster Asian session as concerns about China’s economy and a tight U.S. presidential election dampen risk sentiment. If it stops going down for three days.
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Euro Stoxx 50 futures edged lower, while contracts for US stocks advanced. Most Asian equity benchmarks retreated, with losses led by China. In Japan, Finance Minister Katsunobu Kato said he saw a quick and swift move in currency markets after the yen fell more than 1% against the greenback on Wednesday.
The benchmark US 10-year yield fell three basis points, largely erasing the previous session’s gains as it hit its highest level in nearly three months. The dollar edged lower as oil prices rebounded after retreating on Wednesday as traders weighed tensions in the Middle East and the prospect of a market balance heading into 2025.
In the US, the presidential contest between Donald Trump and Kamala Harris could hardly be tighter, with the candidates statistically tied among voters in each of the seven swing states in the Bloomberg News/Morning Consult poll.
“Asian markets were generally mixed in the current session, with some market anxiety as we approach the upcoming US election,” said Jun Rong Yeap, market strategist at IG Asia Pte. “The new strength in the US dollar and the rise in Treasury yields remain a source of reservations for taking aggressive risks in the region.”
Asian equities have lost momentum after a nearly 5% rally in September as traders weigh risks including concerns about whether China’s new stimulus blitz is enough to revive growth. The pace of Federal Reserve easing is also on investors’ radars, with swaps traders now less than 100% certain of a rate cut during the two remaining policy meetings this year.
“There is still some doubt as to whether the stimulus is fundamentally changing,” Vanessa Xu, chief investment officer at VS Partners, told Bloomberg TV. The huge price swings in Chinese stocks in recent weeks reflect a “war between tourist money and serious money,” he said.
Elsewhere, Taiwan Semiconductor Manufacturing Co. halted shipments to a client after discovering that the chips it made for the client ended up with Huawei Technology Co., which could have violated U.S. sanctions. In South Korea, shares of SK Hynix Inc. rise after the company posted record monthly profits and revenue. Korean auto major Hyundai Motor’s third-quarter operating profit missed estimates.