Asia stocks set to drift; dollar powers higher

Pedestrians are reflected in an electronic stock board outside a securities firm in Tokyo. (Bloomberg pic)

SYDNEY: Asian stocks looked set for a mixed day after a muted US session as markets remain hostage to a crucial round of trade talks. The dollar strengthened for an eighth day, and 10-year Treasuries fell.

Futures were higher in Japan and Australia, while contracts in China and Hong Kong pointed lower.

The S&P 500 Index finished little changed after drifting most of the session.

The dollar entered its longest rally since Jan 2016, recouping its year-to-date losses, as central banks around the world tilt more to the dovish side, boosting the relative appeal of the greenback.

Investors are weighing the prospects for success of this week’s high-level US-China trade talks ahead of a March 1 deadline for higher tariffs, while mulling the likelihood of a US recession and its impact on earnings as reporting season rolls on.

The threat of a shutdown in Washington also looms, with political tensions flaring again between Congress and the president.

Elsewhere, West Texas Intermediate crude slipped to its lowest close in two weeks, while gold headed for its first drop in three sessions.

The pound stayed lower after the UK economy unexpectedly shrank in December.