Asian stocks seen weak Monday on US cues; bonds eyed

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent. Australian stocks shed 0.4 percent and South Korea's Kospi fell 0.6 percent. Shanghai stocks retreated more than 2 percent after data released over the weekend showed Chinese exports fell 1.8 percent in April. Japan's Nikkei bucked the trend and rose 0.5 percent as the yen's recent surge appeared to halt for now. (A pedestrian walks past a display showing Tokyo's Nikkei Stock Average during an afternoon trading session in Tokyo, Japan, 06 May 2016. - EPA)

HONG KONG: Asian stocks look set to edge lower for a second day on Monday as weak cues from U.S. share markets and declining European government bond yields on political worries push investors to take profits after a recent rally.

Markets are holding in recent broad trading ranges, and interest is turning to U.S. President Donald Trump's policy speech to a joint session of Congress on Tuesday night where he is expected to provide clues on his plans to cut taxes.

"With the market getting impatient with Trump's proposed stimulus spending program, the rising political uncertainty around the globe is getting the bulk of the market's attention," ANZ strategists wrote in a morning note.

MSCI's broadest index of Asia-Pacific shares outside Japan eased slightly in early trade, with early Asian stock markets treading water. The index fell 0.7 percent on Friday, but is still up more than 11 percent since end-December.

U.S. stocks clawed their way to a higher close on Friday, with major indices spending much of the trading session in negative territory.

In currencies, the dollar scored some early gains against the Japanese yen with the pair rising to 112.21 as a decline in European bond yields burnished the relative appeal of U.S. debt among Japanese investors.

Sovereign bond yields fell on Friday on a renewed flight to safety bid thanks to weak stock markets and a looming election in France that poses a key political risk for markets.

Investors fear far-right National Front leader Marine Le Pen might win the presidential election this year and lead France out of the euro zone. Polls show Le Pen losing to either centrist Emmanuel Macron or right-wing Francois Fillon, but few people are willing to count her out.

Ten-year German bond yields have dropped nearly 30 basis points so far this month, far outpacing a 13 basis point decline in yields of comparable U.S. debt.

Brent crude edged higher to $56.04 per barrel while U.S. West Texas Intermediate was broadly flat at $54 a barrel.- Reuters