- Dollar, S&P 500 Futures Drop on Health-Care Flop
The dollar and U.S. equity futures built on Friday’s declines and gold climbed with bonds as investors shunned risk assets amid increased skepticism of U.S. President Donald Trump’s ability to implement his economic agenda after last week’s failed U.S. health-care deal.
The yen strengthened, while benchmark gauges from Japan to Singapore fell with S&P 500 Index futures. The dollar was on the verge of erasing the rally spurred by Trump’s election victory. Australian government bonds rose with Treasuries. Oil slipped, giving up earlier gains on a pledge by producers to consider extending their pact limiting supply.
“Markets are likely to start the week in a cautious mode,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “This was the first major attempt by the administration to reform the government and its miserable failure exposes the limits of President Trump.”
Reflation trades sparked by Trump’s election are faltering in March, with the dollar retreating and the S&P 500 Index headed for its worst month since October. Meanwhile, emerging-market assets are climbing, with the global equities gauge for developing nations on course for a third monthly gain in March.
Volatility is climbing, after a measure for the S&P 500 had its biggest weekly jump of the year and touched the highest level since December. Gauges of price swings from Hong Kong to India rose on Monday, with the volatility measure for the Nikkei 225 Stock Average climbing 9.7 percent.
“The test for markets comes tonight, as American investors face the first full session of trading,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “A significantly weaker U.S. dollar suggests the news is not fully priced into shares.”
Here are the main moves in markets:
Stocks
- Futures on the S&P 500 lost 0.7 percent as of 12:58 p.m. in Tokyo. The underlying gauge last week tumbled 1.4 percent.
- The MSCI Asia Pacific Index fell 0.3 percent, with almost three shares falling for every one advancing. Raw-material and financial shares led declines.
- Japan’s Topix lost 1.2 percent, poised for the lowest close since Feb. 9. Australia’s S&P/ASX 200 Index retreated 0.2 percent and South Korea’s Kospi declined 0.6 percent. Singapore’s Straits Times Index retreated 0.5 percent.
- Hong Kong’s Hang Seng dropped 0.3 percent and the Shanghai Composite Index rose 0.1 percent.
- The MSCI Emerging Markets index gained 0.1 percent, with benchmark indexes in Malaysia and Vietnam advancing.
Currencies
- The yen rose 0.9 percent to 110.34 per dollar, bringing its monthly gain to 2.2 percent so far.
- The Bloomberg Dollar Spot Index fell 0.4 percent. It’s down more than 4 percent for the year.
- The euro gained 0.5 percent to $1.0848 and the British pound added 0.5 percent.
- The Australian dollar rose 0.1 percent.
Bonds
- The yield on 10-year Australian government bonds slid six basis points to 2.69 percent.
- Yields on 10-year Treasuries dropped five basis points to 2.37 percent, after giving up one basis point on Friday.
Commodities
- Gold rose 1 percent to $1,256.53, the highest since February. The metal is up 0.7 percent for March.
- Oil slipped 0.3 percent to $47.84 a barrel, erasing an earlier gain of as much as 0.7 percent. Crude producers pledged to consider extending their pact limiting supply, as half a dozen nations said more time was needed to drain swollen stockpiles.
