Asia stocks tipped to open lower as eyes on UK May’s Brexit speech
Futures pointed to a lower open for Asian markets on Tuesday, with investors taking to the sidelines ahead of British Prime Minister Theresa May’s speech on Brexit plans due later in the global day, as well as President-elect Donald Trump’s inauguration stateside at the end of the week.
Nikkei futures in Chicago were down more than 1 per cent at 19,085, while Osaka futures fell to 19,050, indicating a lower open for the Nikkei Stock Average , which finished at 19,095.24 on Monday.
In Australia, markets opened lower, with the benchmark ASX 200 down 0.66 per cent in early trade, with most sectors lower. The financial sector was off 1.12 per cent, with major banks selling off. Shares of ANZ fell 1.49 per cent, Commonwealth Bank of Australia off by 0.97 per cent, Westpac down by 1.15 per cent and the National Australia Bank off by 1.48 per cent.
In her speech, May is expected to outline plans for the United Kingdom’s plans to exit the European Union. On Monday, the British pound fell to three-month lows , following local media reports that suggested May will announced a “clean” and “hard” Brexit, pulling the country from the European market and the European customs union, in exchange for the ability to control immigration laws and leave the jurisdiction of the European Court of Justice.
“The PM is expected to walk a fine line between providing enough information on the government’s intentions, without necessarily showing too much of Britain’s negotiating hand ahead of official discussions with the EU,” said Rodrigo Catril, a currency strategist at the National Australia Bank, in a note.
The pound traded at US$1.2026 as of 6:54 am Hong Kong time on Tuesday. The euro gained against the pound, with the pair up 0.25 per cent at 0.8815.
In the broader currency market, the dollar strengthened against a basket of currencies to trade at 101.64, compared to its last close at 101.18. The yen traded at 114.06, strengthening from levels above 116 to the dollar in the previous week. Meanwhile the Australian dollar fetched $0.7467, climbing from levels below $0.7350 last week.
Stateside, markets were closed Monday for a public holiday. But analysts said Donald Trump ‘s recent comments have done little to ease market concerns, particularly over the future of Sino-US relations.
“While (his) comment that he wouldn’t name China as a currency manipulator on “day one” was seen as a positive, he also said that his adherence to the One China policy depends on progress by China on trade issue,” said Catril, pointing out given Beijing’s sensitivity to trade issues, the comments have “not been seen as conducive to ease tension between the two countries.”