Asia stocks set to edge lower after US drop

Pedestrians walk pass past an electronic stock board outside a securities firm in Tokyo. (Bloomberg pic)

SYDNEY: Stocks in Asia looked set for modest declines after the S&P 500 Index dropped to its lowest since April, as investors grappled with signs of some key economies slowing against a backdrop of uncertain trade conditions.

Most Asian equity futures slipped after Treasuries gained with the yen on Friday when US stocks tracked global declines amid concern over the health of world economic growth.

The dollar is coming off the back of a strong week that took it to the highest in a month.

Oil remains below US$52 (RM217) in New York as traders weigh the implications of softer demand for 2019. Japanese bonds are in focus as a recent slide in yields threatens to push the benchmark 10-year bond yield below 0%.

With global growth forecasts for 2019 being questioned amid the US-China trade tussle, investors may get some clues on the policy path from this week’s Federal Reserve meeting and press conference from Chairman Jerome Powell.

That’s the last key event scheduled as global equities round out what’s been the worst year since 2011, on course to drop about 9% amid concern surrounding the earnings outlook.

This weekend brought further changes at the Trump administration. Interior Secretary Ryan Zinke will leave at the end of the year amid a swirl of federal investigations.

Next on the list could be Homeland Security Secretary Kirstjen Nielsen, and the president has also mused about replacing Commerce Secretary Wilbur Ross, people familiar said.

Investors will keep monitoring Brexit developments after Theresa May’s team pushed back against reports they are warming to a second referendum on Brexit.

David Lidington, her effective deputy, and Chief of Staff Gavin Barwell rejected the idea of another vote after newspapers reported they’d held talks on the issue. The UK prime minister will face Parliament on Monday.