US-China trade, RBA rate decision, currencies

Stocks in Asia were set to trade lower on Tuesday following negative trade developments overnight.Futures pointed to a lower open for Japanese stocks. The Nikkei futures contract in Chicago was at 23,210 while its counterpart in Osaka was at 23,180. That compared against the Nikkei 225’s last close at 23,529.50.Shares in Australia declined in early trade, with the S&P/ASX 200 dropping about 1.5%. The Reserve Bank of Australia’s interest rate decision is set to be out around 11:30 a.m. HK/SIN on Tuesday.Market reaction to retail stocks in Hong Kong will be watched on Tuesday, after total retail sales volume for October in the embattled city dropped 26.2% year-on-year, falling by their steepest on record, according to a Reuters report. The city has been rocked by months of anti-government protests.Overnight on Wall Street, stocks declined amid disappointing manufacturing data. The Dow Jones Industrial Average fell 268.37 points to 27,783.04. The S&P 500 shed 0.9% to 3,113.87 — its biggest one-day loss since Oct. 8 — while the Nasdaq Composite fell 1% to 8,567.99.The Cboe Volatility Index, which is regarded as a top fear gauge in the market, rose to 14.3 from 12.6.Manufacturing activity in the U.S. continued to contract last month, the Institute for Supply Management said Monday. The ISM Manufacturing PMI dipped to 48.1 in November, below an estimate of 49.4. A reading below 50 denotes contraction.Meanwhile, uncertainty remains on the trade front. U.S. President Donald Trump said China still wants to make a deal on trade, “but we’ll see what happens.”Investors have been monitoring developments on trade negotiations between Washington and Beijing in anticipation of an elusive “phase one” deal being reached between the two parties. If no agreement is reached by Dec. 15, additional tariffs on Chinese goods exported to the U.S. will kick in.To exacerbate concerns on the trade front, Trump also said Monday he will restore tariffs on metal imports from Brazil and Argentina.The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.887 after declining from highs above 98.3 seen earlier.The Japanese yen, often seen as a safe-haven currency in times of market uncertainty, traded at 109.02 per dollar after strengthening sharply from levels above 109.5 yesterday. The Australian dollar was at $0.6816 after rising from levels below $0.678 in the previous session.What’s on tap:Australia: Reserve Bank of Australia interest rate decision at 11:30 a.m. HK/SIN

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