SYDNEY: Asian stocks were poised for declines Wednesday after renewed concern about a global economic slowdown and an escalation in trade tensions pushed US stocks and Treasury yields lower.
Futures signalled losses in Japan, Hong Kong and Australia.
The S&P 500 Index fell for the first time in nine sessions as the Trump administration threatened tariffs on the European Union and the International Monetary Fund cut its global growth outlook to the lowest since the financial crisis.
Australian bonds climbed, tracking overnight moves that saw the 10-year Treasury yield fall to 2.50%, while the greenback traded mixed against major currencies.
The pound steadied as the European Union looked set to force the UK to delay Brexit for as long as a year.
Sentiment remains fragile, with the IMF’s latest report on global growth highlighting fears about a slowing world economy that has plagued markets for months.
The US and the EU appeared to open another front in their trade war, while negotiations with China remain unsettled. Federal Reserve minutes, American inflation data and a European Central Bank decision later this week could add to anxieties or help provide calm.
“Equity markets have been up for a really long time,” Josh Kutin, head of asset allocation for North America at Columbia Threadneedle Investments, said in an interview at Bloomberg’s New York headquarters. “It seems that there is just more and more data coming in which is suggesting the economy is slowing down.”
Elsewhere, Saudi Aramco, the world’s largest oil company, received more than US$100 billion in orders for its debut bond sale, kick-starting an offering with yields likely to fall in line with or below Saudi Arabia’s sovereign debt.