MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent. Australian stocks lost 0.6 percent and South Korea's Kospi was little changed, while Japan's Nikkei dipped 0.2 percent on a slightly stronger yen.
SYDNEY: Asian stocks faltered on Tuesday as Chinese economic data disappointed and investors pondered whether a marked flattening in the U.S. yield curve might ultimately be a harbinger of a slowdown there.
China's retail sales rose 10 percent on the year in October, while industrial output grew 6.2 percent. Both came in under market forecasts and nudged down the Australian dollar, which is often used as a liquid proxy for China wagers.
The immediate damage was limited in stocks with the blue-chip CSI300 indexoff 0.4 percent and EMini futures for the S&P 500
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent after two sessions of declines, while Australia fell 0.8 percent.
Japan's Nikkei managed to recoup 0.5 percent after four sessions of losses.
Investors were waiting for any signs of compromise on U.S. tax policy after U.S. Senate Republicans on Thursday unveiled a plan that would cut corporate taxes a year later than a rival House of Representatives' bill.
Also on the menu are no fewer than 13 central bank speakers, including the heads of the U.S., European, British and Japanese central banks.
On Wall Street, a sharp drop in General Electric shares was offset by gains in high dividend-paying sectors including consumer staples and utilities.
The Dow <.DJI> rose 0.07 percent, while the S&P 500 <.SPX> added 0.10 percent and the Nasdaq <.IXIC> 0.1 percent.
General Electric
Currency markets were mostly quiet, with the dollar barely changed against a basket of counterparts at 94.510 <.DXY>. The euro
Sterling hovered at $1.3113
May's blueprint for Britain's departure from the EU faces a crucial test starting on Tuesday, when lawmakers try to win concessions on legislation to sever ties. -
The dollar was steady at 113.68 yen
EYING THE YIELD CURVE
A rise in U.S. bond yields has generally made it more attractive to buy dollars with money borrowed in low-rate currencies like the yen and Swiss franc.
Figures out on Monday from the Commodity Futures Trading Commission showed the speculative net short position in the Japanese yen had blown out to the largest since January 2014 and in the Swiss franc to the biggest since December 2016.
Yields on Treasury two-year notes
The trend in part reflects market wagers the U.S. Federal Reserve's plans to hike rates in December and two or three times next year will prove all too successful in restraining inflation by ultimately slowing the economy.
Tom Porcelli, chief U.S. economist at RBC Capital Markets, noted that a glance at history suggested a flatter, and particularly an inverted, yield curve was "compelling as an early warning sign" of recession.
However, history also showed that the average amount of time it took the curve to go from flat to inverted was 18 months and the average time to go from inverted to recession was 18 months.
"So even if we take the inverted curve as gospel, it suggests the expansion still has multiple years in it," said Porcelli.
In commodity markets, gold
Oil prices held in a tight range as support from Middle East tensions and record long bets by fund managers balanced rising U.S. production.
U.S. crude
Earlier report:
Asia stocks shaky before China data, ponder yield curve
SYDNEY: Asian stocks wobbled on Tuesday as investors awaited developments in U.S. tax reform efforts, while contemplating if a marked flattening in the U.S. yield curve might ultimately be a harbinger of an economic slowdown there.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.25 percent after two sessions of declines, while Australia fell 0.9 percent.
Japan's Nikkei was choppy, down 0.1 percent to add to four sessions of losses.
Investors were waiting for any signs of compromise on U.S. tax policy after U.S. Senate Republicans on Thursday unveiled a plan that would cut corporate taxes a year later than a rival House of Representatives' bill.
In Asia, the highlight will be Chinese data on industrial output, retail sales and urban investment, while the United States releases its own retail sales figures later in the day.
Also on the menu are no fewer than 13 central bank speakers, including the heads of the U.S., European, British and Japanese central banks.
On Wall Street, a sharp drop in General Electric shares was offset by gains in high dividend-paying sectors including consumer staples and utilities.
The Dow <.DJI> rose 0.07 percent, while the S&P 500 <.SPX> added 0.10 percent and the Nasdaq <.IXIC> 0.1 percent.
General Electric
Currency markets were mostly quiet, with the dollar barely changed against a basket of counterparts at 94.495 <.DXY>. The euro
Sterling hovered at $1.3113
May's blueprint for Britain's departure from the EU faces a crucial test starting on Tuesday, when lawmakers try to win concessions on legislation to sever ties.
The dollar was steady at 113.66 yen
EYING THE YIELD CURVE
A rise in U.S. bond yields has generally made it more attractive to buy dollars with money borrowed in low-rate currencies like the yen and Swiss franc.
Figures out on Monday from the Commodity Futures Trading Commission showed the speculative net short position in the Japanese yen had blown out to the largest since January 2014 and in the Swiss franc to the biggest since December 2016.
Yields on Treasury two-year notes
The trend in part reflects market wagers the U.S. Federal Reserve's plans to hike rates in December and two or three times next year will prove all too successful in restraining inflation by ultimately slowing the economy.
Tom Porcelli, chief U.S. economist at RBC Capital Markets, noted that a glance at history suggested a flatter, and particularly an inverted, yield curve was "compelling as an early warning sign" of recession.
However, history also showed that the average amount of time it took the curve to go from flat to inverted was 18 months and the average time to go from inverted to recession was 18 months.
"So even if we take the inverted curve as gospel, it suggests the expansion still has multiple years in it," said Porcelli.
In commodity markets, gold
Oil prices held in a tight range as support from Middle East tensions and record long bets by fund managers balanced rising U.S. production. - Reuters
Earlier report:
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