Asian shares increased slightly in early trade on Thursday, with caution prevailing as investors waited for some kind of resolution to Sino-U.S. trade talks, whereas the euro stayed under pressure before the European Central Bank meeting.
Japan’s Nikkei average tumbled 0.6 percent, while Australian shares added 0.2 percent.
MSCI’s widest index of Asia-Pacific shares outside Japan increased 0.1 percent in early trade. It was not far from its five-month high marked a week ago and rose 10.4 percent year-to date.
All-night, U.S. stocks’ main indexes dropped for a third session, with the S&P 500 posting its largest one-day drop in a month, as investors sought reasons to buy after the market’s strong rally to begin the year.
“For some time, markets had been pricing in good news, namely that the talks between the U.S. and China will likely go well,” Tatsushi Maeno said, senior strategist at Okasan Asset Management. “Now markets are having a pause.”
Adding to worries about the meetings was data that showed the U.S. goods trade deficit surged to a record high in 2018 as strong national request fueled pulled in imports, in spite of the Trump government’s “America First” policies aimed at shrinking the gap.
Other U.S. data recommended some slowing in the labor market, though the pace of job gains remains more than adequate to drive the unemployment rate down.
The ADP National Employment Report showed private payroll increased by 183,000 in February after rising 300,000 in January. Economists had forecast private payrolls advancing 189,000 in February.
The administration’s more comprehensive employment report for February is planned for release on Friday.
Moreover, assessing on investor sentiment were wider worries about growth after the Organization for Economic Co-Operation and Development cut predictions again for the worldwide economy in 2019 and 2020.
“Chinese macroeconomic data remains weak at the moment but I expect them to improve by the middle of the year,” said Okasan’s Maeno.
Investors are currently looking forward to the ECB’s board conference later on Thursday. The central bank is anticipated to slash growth forecasts and give its strongest sign yet that new stimulus is coming in the form of more inexpensive loans.
In the currency market, the euro traded at $1.1312, soaring close to a two-week low on anticipations that the ECB could recommend offering inexpensive long-term loans for banks.
The loans, known more officially as Targeted Long-Term Refinancing Operations (TLTROs), are anticipated to boost troubled euro zone lenders.
The dollar eased 0.1 percent to 111.62 yen, moving more away from Tuesday’s 2-1/2-month top of 112.135, while the dollar index, which measures the greenback versus a basket of six of its currencies, barely moved.
The Canadian and Australian dollar dropped to two-month lows as traders climbed back holdings on anticipations policy-makers would leave interest rates alone in the predictable future or even lower them to counter their softening economies.
Adding to the Aussie’s woes on Thursday was data showing local sellers suffered another bleak month in January, in a sign general financial momentum was slowing.
U.S. oil prices were lower and Brent prices bordered up after data from the Energy Information Administration showed an unforeseen sharp build in U.S. crude inventories, but a third weekly drawdown in gasoline stocks kept losses at bay.
U.S. crude futures stood at $56.11 per barrel fell 0.2 percent, in early Asian trade. They hit a 3-1/2-month high of $57.88 on Friday.
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