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Asian Stocks Set to Slip as Central Banks Meet: Markets Wrap

Andreea Papuc
A pedestrians is reflected in an electronic stock board outside a securities firm in Tokyo, Japan, on Tuesday, June 12, 2018. Japanese stocks rose as President Donald Trump and North Korean leader Kim Jong Un met in Singapore and signed a joint agreement. Photographer: Shiho Fukada/Bloomberg

Asian stocks are poised to open in the red following a lackluster session in the U.S. as investors turn their attention to the major central bank meetings this week after shrugging off Tuesday’s North Korea summit. The dollar gained alongside Treasury yields.

Futures were lower in Japan, Australia and Hong Kong. Though the S&P 500 Index recovered from session lows, volumes were below average. Safe-haven assets including the yen and gold edged lower amid the prospects of diminishing geopolitical risks after President Donald Trump and Kim Jong Un pledged to work toward peace on the Korean Peninsula. The British pound rose after Prime Minister Theresa May fended off a rebellion by pro-EU Conservatives and won a key Brexit vote, only to give up most of that gain.

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The U.S.-North Korean summit and last weekend’s rancorous G-7 meeting have yielded the spotlight to central banks, with a seemingly certain Federal Reserve rate increase on Wednesday, plus the prospect of a hawkish European Central Bank tilt on Thursday. The Bank of Japan’s policy decision is due Friday. Tuesday’s U.S. inflation figures -- which were in line with estimates -- may reignite the four-hikes-in-2018 debate ahead of the Fed’s decision.

Elsewhere, West Texas crude fluctuated around $66 a barrel after Iraq joined other OPEC members in resisting a push to boost oil supplies. The Turkish lira led decliners in emerging-market currencies ahead of the possible U.S. rate increase, which could suck more cash from developing nations.
These are some key events to watch this week:

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  • The Federal Reserve is expected to raise interest rates Wednesday as the U.S. economy remains solid.
  • The European Central Bank rates decision comes Thursday with a briefing from President Mario Draghi.
  • The Bank of Japan June monetary policy decision and news conference is Friday.
  • FIFA expects more than 3 billion viewers for the World Cup that begins this week in Russia.

And these are the main moves in markets:

Stocks

  • Futures on the Nikkei 225 Stock Average fell 0.3 percent in Singapore.
  • Australia’s S&P/ASX 200 Index futures lost 0.1 percent.
  • Hang Seng Index futures declined 0.4 percent.
  • S&P 500 futures rose 0.1 percent as of 7:04 a.m. in Tokyo. The S&P 500 climbed 0.2 percent.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.3 percent to its highest in over a week.
  • The euro fell 0.3 percent to $1.1750.
  • The British pound fell less than 0.05 percent to $1.3373.
  • The Japanese yen was steady at 110.38 per dollar, near the weakest in almost three weeks, after decreasing 0.3 percent.

Bonds

  • The yield on 10-year Treasuries increased one basis point to 2.96 percent.

Commodities

  • West Texas Intermediate crude fell 0.5 percent to $66.02 a barrel after gaining for two days.
  • Gold was little changed at $1,295.90 an ounce.

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